Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with),—

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:

West Thurrock Estate Bill [Lords].

Wear Navigation and Sunderland Dock Bill [Lords].

Nottingham Corporation Bill [Lords].

Stockton-on-Tees Corporation Bill [Lords].

Bills to be read a Second time.)

Blackburn Corporation Bill [Lords] (by Order),—

Second Reading deferred till Thursday.

East Lothian Water Order Confirmation Bill,—

Read a Second time; and ordered to be considered To-morrow.

IPSWICH CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL,—

" to confirm a Provisional Order made by the Minister of Transport under the Ipswich Corporation Act, 1925, relating to Ipswich Corporation Trolley Vehicles," presented by Captain Austin Hudson; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 154.]

NEWCASTLE-UPON-TYNE CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL,

" to confirm a Provisional Order made by the Minister of Transport under the

Newcastle - upon - Tyne Corporation (General Powers) Act, 1935, relating to Newcastle-upon-Tyne Corporation Trolley Vehicles," presented by Captain Austin Hudson; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 155.]

PIER AND HARBOUR PROVISIONAL ORDER (PLYMOUTH) BILL,

" to confirm a Provisional Order made by the Minister of Transport under the General Pier and Harbour Act, 1861, relating to Plymouth," presented by Captain Austin Hudson; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 156.]

WEST MIDLANDS JOINT ELECTRICITY AUTHORITY PROVISIONAL ORDER BILL,

"to confirm a Provisional Order made under section one of the Electricity (Supply) Act, 1922, relating to West Midlands Joint Electricity Authority," presented by Captain Austin Hudson; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 157.]

Oral Answers to Questions — BRITISH ARMY.

ESTABLISHMENTS AND RESERVES.

Mr. Day: asked the Secretary of State for War the establishments of the Regular Army, Territorial Army, and Reserves as at the last convenient date, and the figures for the comparable period in 1914?

The Secretary of State for War (Mr. Hore-Belisha): As the answer contains a number of figures I will, with the hon. Gentleman's permission, circulate it in the OFFICIAL REPORT.

Mr. Day: Will the figures which the Minister is going to circulate show the absolute minimum requirements for the defence of the Empire?

Mr. Hore-Belisha: Yes, Sir.

Following is the answer:

—
Establishment.




1st April, 1914.
1st April, 1938.


British Troops, exclusive of India and Burma:—





Regimental, Staff and Miscellaneous Establishments
…
168,762(a)
161,451(b)


Colonial and Indian Troops
…
8,771
5,249


Army Reserve
…
147,000
142,500


Supplementary Reserve (including Permanent Staff)
…
—
56,465


Special Reserve (including Regular Establishment)
…
81,097
—


Militia, etc. (including Permanent Staff)
…
6,246
1,132


Territorial Army (including Permanent Staff)
…
315,485
203,899


Officers Training Corps (Officers and Permanent Staff)
…
1,110
1,049


(a) Excludes additional numbers (3,300), Royal Flying Corps (1,429) and Central Flying School (103).


(b) Excludes additional numbers (779).

LIBRARIES.

Mr. Sorensen: asked the Secretary of State for War whether both fiction and non-fiction libraries are established in all military barracks and other permanent centres; whether the non-fiction books include those other than of a military technical character; and whether any type of book available in public libraries is equally available to all ranks in the Army?

Mr. Hore-Belisha: The reply to the first two parts of the question is "Yes, Sir," and to the third part that there is no regulation restricting the kinds of books which library committees may recommend for purchase.

Mr. Robert Gibson: Is there active collaboration between the War Office and the local authorities for the interchange of books with public libraries?

Mr. Hore-Belisha: Not as far as I am aware.

Mr. Gibson: Will the right hon. Gentleman take steps to see that such facilities are made possible for the use of the soldiers?

Mr. Sorensen: I understood that the right hon. Gentleman replied in the affirmative to the first part of the question; do I understand that he wishes to qualify that statement?

Mr. Hore-Belisha: No, Sir; my answer stands as it was given.

Mr. R. Gibson: Will the right hon. Gentleman take steps to see that there is such collaboration?

Mr. Hore-Belisha: It may not be possible to achieve an arrangement with the local authorities to exchange the books, but the books can be provided quite freely.

Mr. Gibson: Although it may not be possible to achieve an arrangement, will the right hon. Gentleman do his best?

Mr. Hore-Belisha: If the hon. and learned Gentleman will tell me what he has in mind and make a proposal to me, I shall be only too happy to consider it.

MARRIED SOLDIERS (FAMILY ACCOMMODATION).

Mr. Sorensen: asked the Secretary of State for War how many married soldiers, approximately, are provided by the War Office with accommodation for their families; what proportion of such accommodation conforms to standards recommended by housing and health authorities; and whether he is taking steps to ensure that all such accommodation has adequate cubic air space and domestic facilities in accordance with modern standards?

Mr. Hore-Belisha: The answer to the first part of the question is, about 15,000, and to the other parts that only about one-third of the total number of quarters remain to be improved. The rest are at- least up to Ministry of Health standards.

Mr. Sorensen: How long is it likely to take to bring the other third up to the requisite standard?

Mr. Hore-Belisha: I should hesitate to give a date, but I assure the hon.


Gentleman that I am most conscious of the necessity of making the greatest progress which is consistent with not disturbing the families who are in the quarters.

Oral Answers to Questions — TERRITORIAL ARMY.

ANTI-AIRCRAFT UNITS, LONDON.

Lieut.-Colonel Heneage: asked the Secretary of State for War whether the London County Council refused to allow the siting of permanent anti-aircraft gun positions on land owned by them; and whether the difficulties raised have now been resolved?

Mr. Hore-Belisha: The answer to the first part of the question is "No, Sir." My Department is in active negotiation on this subject with the London County Council, who, I am glad to say, have shown every desire to co-operate.

Lieut.-Colonel Heneage: If I bring to my right hon. Friend's notice a case where they have refused, will he look into it?

Mr. Muff: Is the hon. and gallant Gentleman doing a service to the House when he puts such a question?

Major Macnamara: asked the Secretary of State for War whether all the antiaircraft units composing the defence of London are equipped with their full complement of guns, height-finders, and predictors; and whether these are ready for immediate use in an emergency?

Mr. Hore-Belisha: Modernised 3-inch guns, complete with the requisite scale of instruments, sufficient for training, are held by all gunner units of the 1st Anti-Aircraft Division. They are ready for immediate use in emergency.

Major Macnamara: Have they actually got them now?

Mr. Hore-Belisha: Yes, Sir, as I have stated.

Major Whiteley: What does my right hon. Friend consider to be sufficient for training?

Mr. Hore-Belisha: There is a quota for training which is, of course, regulated and determined by the amount of accommodation for these guns. The war stores are, of course, kept in mobilisation stores, but the actual quota required for training, which the units can accommodate has been issued.

Mr. Thorne: What is meant by "the defence of London"—what is the geographical area?

Mr. Hore-Belisha: I have given a wider answer. I have taken the whole Division which is much wider than London.

Mr. Sandys: Is the full quota available in the stores?

Mr. Hore-Belisha: I have said that a quota for training is available. It is either with the units or it is in store for them, so that it can be issued for camps.

Mr. Sandys: Is the war-time quota in the store?

Mr. Hore-Belisha: I am asked whether the requirements of the units have been supplied. In war, of course, very much greater quantities are required. If my hon. Friend wants an answer on that point, I would say that the object of our rearmament programme is to provide greater and greater numbers. Those numbers, of course, will be, and are being, provided gradually. What they require for training is available.

Mr. Sandys: asked the Secretary of State for War whether he can give an assurance that the Territorial anti-aircraft units, composing the defence of London, can, in the event of war, be supplied with their full complement of guns without having to draw upon the guns of the Regular Army?

Mr. Hore-Belisha: The programme now proceeding for equipping Territorial antiaircraft units provides for their being equipped in full, without having to draw upon the equipment of the Regular Army.

Major Whiteley: asked the Secretary of State for War whether all the guns allotted to the anti-aircraft units concerned with the defence of London are equipped with up-to-date electrically-controlled instruments?

Mr. Hore-Belisha: Yes, Sir, with the exception of 10 guns issued temporarily which will be replaced with modern weapons in due course, the guns allotted to the 1st Anti-Aircraft Division are so equipped.

MARRIAGE ALLOWANCE (PERMANENT STAFF, ARTILLERY UNITS).

Lieut.-Colonel Heneage: asked the Secretary of State for War why the increase recently granted for marriage


allowance to the permanent staff of the artillery units of the Territorial Army has been offset by the increased rent for quarters allocated; and will he reconsider this matter?

Mr. Hore-Belisha: The family allowance of 17s. and upwards a week is paid to all married soldiers over 26 years old, who are not provided with quarters, which carry entitlement to furniture, fuel and light or an allowance in lieu. In this latter case the allowance in respect of the wife is naturally deducted. Were this not so, my hon. and gallant Friend will see that a soldier in quarters would be getting a considerable financial advantage over a soldier not in quarters.

Lieut.-Colonel Heneage: If I bring forward individual cases where the charge for quarters has been offset to the marriage allowance, will my right hon. Friend do his best to remedy that position?

Mr. Hore-Belisha: I have explained why there must be an offset, otherwise the men would both be getting quarters and free lodging, fuel and light, and the allowance.

Mr. George Griffiths: If the right hon. Gentleman wants to get some more recruits, will he see that the wife of every married soldier gets some allowance?

Mr. Hore-Belisha: The hon. Gentleman must understand that we have increased the marriage allowance from, roughly, 7s. a week to 17s.

Mr. Griffiths: Are there not many married soldiers under 26 years of age whose wives do not get a penny in allowance?

Mr. Hore-Belisha: That is another matter.

Oral Answers to Questions — SCOTLAND.

HOUSING.

Mr. Gallacher: asked the Secretary of State for Scotland whether he is aware of the deep feeling that exists amongst the villagers of West Wemyss arising out of the proposed transfer of a number of the villagers to a new area because of the lack of a suitable building site in the village; and, as a suitable and quite safe site exists in the Magazine Park, building

on which would make this transfer unnecessary, will he take steps to have this matter investigated?

The Under-Secretary of State for Scotland (Mr. Wedderburn): I would refer the hon. Member to the answer given to him on this subject on 10th February last. No representations have been received regarding the Fife County Council housing policy for the village of West Wemyss since that date. I am informed that the site referred to in the second part of the question is not available for housing purposes.

Mr. Gallacher: In view of the deep feeling which exists among these villagers and the threat to their habitations, will not the hon. Gentleman arrange for one of his inspectors to make an investigation of this site as a suitable site for housing purposes?

Mr. Wedderburn: The selection of sites is a matter for the local authority, and I am informed that the site which the hon. Gentleman mentions is not available for housing purposes.

Mr. Gallacher: Will not the hon. Gentleman use his influence to get this site made available? Why should the villagers be drawn away from their own village when there is a site there that could be quite easily used?

Mr. Gallacher: asked the Secretary of State for Scotland whether he is aware that in the housing of the villagers of West Wemyss preference is being given to the employés of the Wemyss Coal Company, while urgent cases of slum-clearance are neglected; and, as some of these houses are sub-basement and very dark, while others are rotten with damp and rat-ridden, will he cause an inquiry to be made with a view to getting these conditions brought to an end?

Mr. Wedderburn: I am informed that it is not the case that in the letting of their houses the County Council of Fife are giving a preference to persons merely because they are employés of the company referred to. The council take all the relevant circumstances into account, including the proximity of the new houses to the applicants' place of work. The order in which the council take action in respect of unfit houses is a matter which rests in their own hands. I understand that they expect that the removal of


families from overcrowded houses in West Wemyss will release accommodation in fit condition for families who are at present occupying unfit houses in the village.

Mr. Gallacher: Is the Minister aware that I was in the village a week ago, and that only employés of the Wemyss Coal Company have received notices of being provided with new houses; and is he aware that I visited houses, and that if he were to go there—

Mr. Speaker: The hon. Member had better write these facts to the Minister.

Mr. Gallacher: Will the Minister make a visit to the village and look at some of the houses in which people are forced to live?

Mr. Wedderburn: I have visited villages and towns in a great many parts of Scotland which are in much the same position, and I am fully aware of the state of affairs which exists in many parts of the country.

Mr. Barr: asked the Secretary of State for Scotland the total number of houses completed in Scotland with State assistance from 1919 till 31st March, 1938, or the last available date; and the total amount of State subsidy paid in respect thereof?

Mr. Wedderburn: The total number of houses completed in Scotland with State assistance from 1919 till the 31st March, 1938, is 229,112, and the total amount of State subsidy paid up to that date is £25,928,314.

Mr. Buchanan: asked the Secretary of State for Scotland the total number of houses in Glasgow which are occupied that are at present condemned either as being overcrowded or insanitary, or unfit for human habitation; and the total number of families which have been re-housed from houses in the above circumstances during the past 12 months?

Mr. Wedderburn: According to the report on the survey of over-crowding made by the corporation in the winter of 1935, which contains the latest available information on the subject, 74,952 houses in fit condition were then overcrowded. I am informed that 10,148 additional houses, still occupied, are on the corporation's list of insanitary houses to be dealt with under the Housing Acts

as soon as alternative accommodation becomes available. With regard to the last part of the question, 3,006 families have been rehoused from unfit or overcrowded houses during the past 12 months.

Mr. Buchanan: How long does the Department think it will be at the present rate of progress before any hope can be held out to these people of getting decent homes?

Mr. Wedderburn: My right hon. Friend's predecessor has often expressed the view that he could not regard the conditions as satisfactory until the present rate of progress had been very much increased.

Lieut.-Colonel Sir Thomas Moore: Does not my hon. Friend think that this is a disgraceful record for the second city of the Empire?

Mr. Buchanan: asked the Secretary of State for Scotland the total number of houses which have been built by the Glasgow Corporation in the last 12 months; and the numbers for the same period in each of the last four years?

Mr. Wedderburn: The numbers are as follow:

Year ended 30th April,


Number of houses completed.


1934
…
…
…
3,360


1935
…
…
…
4,546


1936
…
…
…
2,903


1937
…
…
…
2,182


1938
…
…
…
2,118

Mr. Westwood: asked the Secretary of State for Scotland whether he is aware that in the Bucksburn area of Aberdeenshire builders are being allowed to recondition houses under the Housing (Rural Workers) Acts with old materials, old fittings, and grates said to be 40 years old; and what action does he propose to take to see that the local authority enforces the use of new materials for reconditioning and reconstruction?

Mr. Wedderburn: My right hon. Friend is arranging for an inspector of the Department of Health to make local inquiries, and he will communicate further with the hon. Member when he receives the report.

PUBLIC CONVENIENCE, WEST WEMYSS.

Mr. Gallacher: asked the Secretary of State for Scotland whether he is aware that there is no public convenience in


West Wemyss; and will he take steps to urge on the local authorities the necessity of proceeding with such without delay?

Mr. Wedderburn: My right hon. Friend is informed by the county council that they have prepared plans for a convenience at West Wemyss and are looking for a site. The matter is entirely for the local authority.

Mr. Gallacher: In view of the very great inconvenience that is caused in that village, will not the Home Office urge upon the county council the necessity of expediting the building of this convenience?

Mr. Wedderburn: Under the Public Act, the local authority may erect such public conveniences in such situations as they may think fit. The subject is not one that is regarded as suitable for intervention by the central Department. I have no doubt that the hon. Member's question will be taken note of.

AGRICULTURAL WAGES COMMITTEE, FIFESHIRE.

Mr. Henderson Stewart: asked the Secretary of State for Scotland what progress has been made to date by the Agricultural Wages Committee in Fifeshire?

Mr. Wedderburn: The committee has held 12 meetings since its establishment in December last. Its proposals have been twice amended after statutory notice and consideration of objections and have been resubmitted, as now amended, for the consideration of the Scottish Agricultural Wages Board at their next meeting on 30th May.

NUTRITION.

Mr. Henderson Stewart: asked the Secretary of State for Scotland whether he has any information regarding malnutrition among the children of farm workers in Fire; what steps have been taken by the Department of Health during the past year to keep this matter under review; and what action is taken in proved cases of malnutrition?

Mr. Wedderburn: I have received no complaints regarding malnutrition among the children of farm workers in Fife. As my hon. Friend knows, the county council have a general responsibility for the health and physical condition of the children of

their area. Last summer my predecessor issued a Memorandum drawing the attention of local authorities to the first report of the Advisory Committee on Nutrition, and stressing the importance of adequate provision for the feeding of children.

Mr. J. J. Davidson: Has there been any proved case of malnutrition submitted to the Secretary of State?

Mr. Wedderburn: No, Sir.

POTATOES (PRICES).

Mr. Westwood: asked the Secretary of State for Scotland whether he is aware of the rise in potato prices in Scotland, with its consequent hardship on the poorer classes of the community; and, if so, what action does he propose to deal with this problem?

Mr. Wedderburn: I would refer the hon. Member to the reply given by my right hon. Friend the Minister of Agriculture and Fisheries on 19th May to a similar question by the hon. Member for East Fife (Mr. Gallacher).

Mr. Westwood: Is the hon. Gentleman aware that that answer dealt with the English situation, and that I am asking a question dealing with Scotland? Is he aware that potato prices have risen as much as from 2d. to 6d. a stone and that they are selling in Glasgow as high as is. 6d.? What action is the Minister taking to safeguard Scottish people from this exploitation, which is his responsibility?

Mr. Wedderburn: The question referred to did not only apply to England but to the whole of the United Kingdom. While potato prices have risen lately, they are, I think, still lower than they were in the corresponding week last year. The hon. Gentleman will find references to the policy of the Potato Board in the question to which I referred.

Mr. Paling: Is the rise in prices due to the action of the Potato Marketing Board?

Mr. Wedderburn: No, I think it is due to the recent severe weather.

MILK SUPPLY, ANGUS.

Mr. Westwood: asked the Secretary of State for Scotland whether his attention has been drawn to the report of the public health authority as to the filthy condition


of milk being supplied to the Milk Marketing Board from the county of Angus; and, if so, what action does he propose to safeguard the health of the people from an impure milk supply?

Mr. Wedderburn: I have seen a Press report of a meeting of the public health committee of Angus County Council to which I presume the hon. Member refers. The milk referred to in the report was supplied by a single producer and is not now being accepted by the board.

Mr. Westwood: Is the hon. Gentleman aware of the appalling state of affairs revealed in the medical officer's report of that county; and will he have inquiries made into the whole question as it affects that county, in view of the fact that of six cows condemned for slaughter, only one had been reported by the owner, and that five were discovered to be in an advanced stage of tuberculosis, and that the milk from these cows was being supplied to the Milk Marketing Board for consumption by the public?

Mr. Wedderburn: That is rather a wider question than the question on the Paper, but I should be glad to receive any representations that the hon. Gentleman may make on the subject.

AIR-RAID PRECAUTIONS.

Mr. Davidson: asked the Secretary of State for Scotland on what date the circular was issued to Scottish local authorities containing recommendations regarding the establishment by them of local gas-mask stores and smaller distributing depots in close proximity to the population to be served; and what Scottish local authorities have submitted proposals for such stores and depots up to date?

Mr. Wedderburn: The circular was issued on the 4th April, 1938. Definite proposals for local respirator stores have been received from two Scottish local authorities (Glasgow and Greenock), and the Air-Raid Precautions Department is aware from correspondence that other authorities are actively surveying buildings which might be readily adapted.

Mr. Davidson: In the case of the two which have submitted proposals, have the central office discussed them and come to any decision?

Mr. Wedderburn: I do not think a final decision has yet been reached. It is only a month since the circular was issued.

Mr. Davidson: Does not the hon. Gentleman think that under present conditions a month is too long?

ADMINISTRATION (COMMITTEE'S REPORT).

Mr. Davidson: asked the Secretary of State for Scotland whether consideration of the Report of the Departmental Committee on Scottish Administration, presided over by the right hon. Member for Pollok (Sir J. Gilmour) is now complete; and, if so, has he any statement to make?

Mr. Wedderburn: No, Sir. I am not yet in a position to make any statement.

Mr. Davidson: Is the Under-Secretary aware that both the Prime Minister and the last Secretary of State have been considering this report for a very long time, and can he make any statement as to when their consideration will be complete?

Mr. Wedderburn: No, Sir, I cannot.

OLD AGE PENSIONERS (PUBLIC ASSISTANCE).

Mr. Davidson: asked the Secretary of State for Scotland the total number of old age pensioners in Scotland receiving assistance in money or kind from local authorities for the year ended March, 1937, and 1938, respectively?

Mr. Wedderburn: The number of old age pensioners receiving public assistance is available only as at 15th May and 15th November in each year. At 15th November, 1936, the number was 37,795; and at 15th November, 1937, 40,241.

SMALL DEBT AND EJECTION COURTS, GLASGOW.

Mr. Buchanan: asked the Lord Advocate whether he is aware that at the Glasgow small debt and eviction courts the clerk of the court frequently grants eviction and other orders against the tenant without reference to the sheriff; and whether he will take steps to see that in all cases the sheriff is present before a decision is made?

Mr. Wedderburn: I am informed that in the small debt court in Glasgow no decrees are granted without the sheriff


hearing parties, except where the defender does not appear or where the parties agree on a settlement, and that in the ejection court no order of eviction is granted without the sheriff hearing parties. After inquiry in the matter I do not consider that any alteration of the procedure is necessary.

Mr. Buchanan: Will the hon. Member tell me where the clerk gets any authority to make a settlement in the court? By what Statute is he empowered to make a settlement?

Mr. Wedderburn: I shall be glad if the hon. Member will give me notice of the question as regards the Statute.

Mr. Buchanan: But I have asked why the sheriff is not present when the decision is reached, and what statutory right has anybody other than the sheriff to make a decision?

Mr. Wedderburn: I have informed the hon. Member that decrees are not made without the sheriff hearing the parties, except where a defender does not appear or where the parties agree to a settlement, but I cannot without notice tell him under what Statute or by what regulation that is done.

Mr. Cassells: Is the Under-Secretary aware that in all sheriff courts other than that of Glasgow the sheriff-substitute is constantly present?

Mr. Wedderburn: No, Sir, I am not aware whether that is so or not.

Mr. Davidson: Has the clerk of the court any power to make a decision or grant a decree?

Mr. Wedderburn: The question asked whether as a fact he does or does not make a decision, and not as to the authority by which he does so.

Mr. Buchanan: But surely that was implied in the question. Cannot the hon. Gentleman see that the law is carried out in court and that the clerks have no right to act as they do?

Mr. Wedderburn: I will certainly do so, but the hon. Member asked me what were the Statutes under which authority was given for the presence of the sheriff to be dispensed with in certain cases. I have told him what the practice is, and said that I shall be glad to answer

the other question regarding the Statute under which it is done, but that I cannot do so unless he gives me notice of the question.

GAS SUPPLIES.

Mr. R. Gibson: asked the President of the Board of Trade whether he will consider, in conjunction with the Mines Department and the Ministry of Transport, the desirability and the feasibility of laying down a gas grid between Glasgow and Edinburgh, with extensions along the Clyde Valley, and to Ayr and Stirling, respectively; what would be the probable cost of such an enterprise and its probable advantages in normal times and in times of emergency, respectively; and Whether he has any statement to make on the subject?

The President of the Board of Trade (Mr. Oliver Stanley): The Departmental Committee on Gas Supplies in the West of Scotland examined thoroughly the question of the distribution of gas produced in the West of Scotland in their report published in 1936, and came to the conclusion that a grid scheme over a wide area was not economically practicable. I see no necessity for a further investigation, but any proposals that the interests concerned wish to make will, of course, receive consideration.

ALBERTA (UNITED KINGDOM INVESTMENTS).

Sir John Mellor: asked the Secretary of State for Dominion Affairs whether he will give an estimate of the amount of capital owned by persons and companies domiciled in the United Kingdom and invested in loans and mortgages in the province of Alberta; and whether he will make a statement as to the application of recent legislation of the Government of Alberta to such investments?

The Secretary of State for Dominion Affairs (Lord Stanley): Information is not available which would enable me to furnish the estimate asked for in the first part of my hon. Friend's question. As regards the second part, I understand that recent legislation of the Province of Alberta applies to United Kingdom investments in the same manner as it applies to investments held by persons resident in Alberta and elsewhere. I have read the reports which have lately appeared in the Press regarding the nature of this


legislation, and have made inquiries concerning it. I hope to receive a reply shortly, and I shall then be happy to communicate further with my hon. Friend.

Oral Answers to Questions — COAL INDUSTRY.

MECHANICAL COAL CUTTING.

Mr. R. J. Taylor: asked the Secretary for Mines the amount of coal cut

Quantity of coal cut by machinery at Mines under the Coal Mines Act, 1911, in Great Britain during the years, 1928–1937.







Coal cut by machines driven by



Year.


Total.







Electricity.
Compressed Air.








Tons.
Tons.
Tons.


1928
…
…
…
…
40,548,915
20,839,217
61,388,132


1929
…
…
…
…
47,555,329
24,394,182
71,949,511


1930
…
…
…
…
50,804,009
24,951,586
75,755,595


1931
…
…
…
…
52,350,151
24,513,886
76,864,037


1932
…
…
…
…
55,698,661
24,586,990
80,285,651


1933
…
…
…
…
62,107,260
25,718,846
87,826,106


1934




73,893,867
29,807,055
103,700,922


1935




80,415,003
32,849,600
113,264,603


1936




89,750,327
35,820,027
125,570,354


1937




96,959,875
40,158,591
137,118,466

HOURS OF WORK.

Mr. James Griffiths: asked the Secretary for Mines whether he can make a statement on the recent meeting of the International Labour Office dealing with the hours of work in coal mines; and what action he proposes to take in the matter, with a view to securing the ratification of the convention on hours of work in coal mines?

Captain Crookshank: The recent tripartite meeting was called to consider the general question of the further reduction of hours of work in coal mines, not the ratification of the 1931 draft convention which was revised in 1935. The meeting agreed a list of points on which it considered that Governments could usefully be consulted, and a resolution expressing the opinion that the question should be placed on the agenda of the 1939 conference with a view to final discussion was carried by 15 votes to nil.

Mr. Griffiths: Will the Government bear in mind that the representatives of the Miners' Federation of Great Britain have indicated clearly that unless there is some international regulation of the hours of labour they will be compelled to take action locally at home?

by electric and compressed-air machines, respectively, for the past 10 years?

The Secretary for Mines (Captain Crookshank): As the reply involves a statistical table, I will, with the hon. Member's permission, circulate it in the Official Report.

Following is the reply:

Mr. Paling: Will the Government do all they can to secure a reduction of the hours?

EXPORT TRADE (FRANCE).

Mr. J. Griffiths: asked the Secretary for Mines whether he can now make a statement following upon his consultations with representatives of the industry in reference to the position of the coal export trade with France?

Captain Crookshank: No, Sir; the consultations are still proceeding.

ANTHRACITE (CANADIAN IMPORTS).

Mr. J. Griffiths: asked the Secretary for Mines whether he is aware that, in the negotiations for a new trade agreement between the Government of the Dominion of Canada and the Government of the United States of America, the representatives of the latter have tabled a request for the right of entry of American anthracite coal to the Dominion on the same terms as United Kingdom anthracite, either by the abolition of the duty on American anthracite or the imposition of a similar duty on United Kingdom anthacite; whether he is having


consultations with the Dominion Government on the matter; and whether he can indicate the present position in the matter?

Captain Crookshank: It is not the practice of His Majesty's Government to give information about particular commodities in respect of which concessions are being sought in trade negotiations.

Mr. Griffiths: Will the hon. and gallant Gentleman answer the question which I asked, which is whether his attention has been called to these negotiations, and whether there have been any consultations with representatives of the Dominion of Canada upon the matter? I ask him to bear in mind that at least one-third of the export trade in anthracite is with Canada, and that if it is lost it will be a serious matter.

Captain Crookshank: The whole question as I said in my answer to the hon. Member for Neath (Sir W. Jenkins) on 8th February, was brought to my attention from South Wales. The reply which I have given is in accordance with the practice in such negotiations, and it follows that I cannot answer the rest of the question.

SAFETY CLASSES (BOYS).

Mr. T. Smith: asked the Secretary for Mines the number of centres at which safety classes for pit-boys were held during the past 12 months and the approximate number of boys who attended?

Captain Crookshank: Safety classes for colliery boys were held at 353 centres during the session 1937–38, and approximately 14,000 boys attended these classes.

Mr. Smith: Can the Secretary for Mines say whether all mining districts have these classes, and whether he has any information as to the percentage of boys taking the full course?

Captain Crookshank: I should require to have notice of that question.

Mr. G. Griffiths: Has the Secretary for Mines any information as to the percentage of accidents to boys who attend safety classes as compared with the percentage of accidents to boys who do not attend?

BLOWN-OUT SHOTS.

Mr. Whiteley: asked the Secretary for Mines the steps taken by the Mining Research Board to prevent blown-out shots; and what method they have recommended for this purpose?

Captain Crookshank: The prevention of blown-out shots depends on the proper placing, charging and stemming of the shot-holes, and the Safety in Mines Research Board recommends for use as stemming material a mixture of sand and clay as described in their Paper No. 84, a copy of which I am sending to the hon. Member.

Mr. R. Gibson: Have the board considered the question of dispensing with the use of explosives and using pneumatic or hydraulic methods instead?

Captain Crookshank: I cannot possibly say offhand all the methods which the Safety in Mines Research Board are considering, but I have answered the question which was on the Paper.

Mr. Gibson: That is the question on the Paper.

ADVENTURE COLLIERY, DURHAM (INSPECTIONS).

Mr. Ritson: asked the Secretary for Mines the number of inspections made by his inspectors at Adventure Colliery, Durham; and what is the result?

Captain Crookshank: The number of inspections made by inspectors of mines at Adventure Colliery since the beginning of this year is 10. As a result of these inspections legal proceedings are to be instituted against the owners, and the manager, in respect of certain alleged contraventions of the law which have already been the subject of questions by the hon. Member. In other respects the colliery was found to be in a satisfactory condition.

SOUTH AFRICA (HIGH COMMISSION TERRITORIES).

Mr. Creech Jones: asked the Secretary of State for Dominion Affairs what is the nature of the commercial treaty with Portugal relating to the High Commission Territories in South Africa?

Lord Stanley: A new agreement which replaces, with a few modifications,


that published in the Command Paper Cmd. 3676, was signed at Lisbon on nth May, and will be issued in due course in the Treaty Series. The agreement provides for reciprocal most-favoured-nation treatment between Mozambique and the High Commission Territories.

Oral Answers to Questions — TRADE AND COMMERCE.

GREAT BRITAIN AND UNITED STATES (TRADE AGREEMENT NEGOTIATIONS).

Mr. H. G. Williams: asked the President of the Board of Trade whether his attention has been drawn to the fact that the imports from the United States increased from £23,733,000 in the first quarter of 1937 to £37,453,000 in the first quarter of 1938, while the exports of British goods to that country fell from £8,947,000 to £4,963,000, and re-exports from £3,791,000 to £1,633,000; and, in view of these facts, will he undertake to arrange for higher duties on American goods in order to redress the balance of trade between the two countries?

Mr. Maxwell: asked the President of the Board of Trade whether, in view of the large increase in the imports from the United States of America during the first quarter of this year and the decline in the exports of British goods to that country in the same period, he will ensure that in the proposed trade agreement arrangements are made to rectify the balance of visible trade with the United States?

Mr. Stanley: I am aware of the trend of trade between this country and the United States in the first quarter of this year, and this will be borne in mind in connection with the trade negotiations. I do not consider that it would be desirable, even if it were practicable, to arrange for a general increase in the rates of import duty on United States goods during the progress of these negotiations.

Mr. H. G. Williams: In view of the enormous fall in our exports to that country and the great increase in our imports at this time, will my right hon. Friend make a very definite request to the United States that they shall forthwith give us some concessions, and intimate that if they do not we shall adopt suitable methods against them?

Mr. Stanley: The matters to which the hon. Member calls attention will be borne in mind in the negotiations.

Mr. Thorne: Does the right hon. Gentleman not think it would be better to get a reduction of duties at the other end than to put on import duties at this end?

Mr. H. G. Williams: That is what I say.

Mr. G. Strauss: asked the President of the Board of Trade what progress is being made in the negotiations over the Anglo-American Trade Agreement?

Mr. Stanley: I can at present add nothing to the reply which I gave to a similar question by my hon. Friend the Member for Willesden, East (Mr. D. G. Somerville) on 17th May.

IMPORT DUTIES.

Mr. Chorlton: asked the President of the Board of Trade whether he will give a table of import duties for this country now in force compared in effect and value with those originally fixed, in order to determine whether they were adequately raised to balance the effect of managd currencies, etc., in other countries?

Mr. Stanley: A full list of import duties is published twice a year in the Customs and Excise Tariff. If any manufacturer feels dissatisfied with the existing rates charged under the Import Duties Act, 1932, or the Safeguarding of Industries Act, 1921, it is open to him to apply to the Import Duties Advisory Committee for increased protection.

Mr. Chorlton: Is it not possible for the Import Duties Advisory Committee to deal with this matter without having received an application?

Mr. Stanley: This method was laid down by this House a few years ago, and I believe that it has worked very satisfactorily, and that this House would be very reluctant to take the course suggested.

Mr. Chorlton: asked the President of the Board of Trade whether the Import Duties Advisory Committee were requested to take notice of the trading conditions affecting import duties in other


countries in order to determine the need for the modification of the duties levied in this country?

Mr. Stanley: The Import Duties Act empowers the Committee to take all the relevant considerations into account.

Sir Joseph Nall: Would the right hon. Gentleman not consider the desirability of raising the general ad valorem duty on imports?

Mr. Stanley: The Import Duties Advisory Committee is concerned with individual applications by individual trades.

Sir J. Nall: Does it not apply to the general duty?

Mr. Stanley: No, Sir. It is concerned with the circumstances in which a particular duty has to be considered rather than with measures of general application.

Mr. Cartland: Is it not a fact that this committee was asked to consider the national interest in all these particular duties, and would not a survey from time to time of general trade conditions be in the national interest?

Mr. G. Strauss: asked the Chancellor of the Exchequer what basis of valuation is adopted in fixing the value for duty purposes on goods imported from countries which pay export subsidies and, in respect of goods invoiced in German marks, whether account is taken of the fact that these marks may be import-blocked marks, or whether, by arrangement with the German authorities, they are interchangeable substantially below the nominal rate of exchange so as to provide the exporter with an export subsidy; and whether he is satisfied that there is no loss to the revenue on this account?

Mr. Levy: asked the Chancellor of the Exchequer whether the Import Duty charged upon German motor cars imported into this country is based upon the value as set out in the invoices accompanying the vehicles, or whether the value of the vehicles in the country of origin is taken into account?

The Chancellor of the Exchequer (Sir John Simon): The definition of value in Section 10 of the Finance Act, 1935, is applied to all imported goods chargeable

with duty ad valorem. That value is in effect the price the goods would fetch in a free market at the port of importation, which may differ materially both from the invoice price and from the value in the country of origin. The basis on which any sterling received for the goods is converted into foreign currency by the seller is not, therefore, necessarily a relevant consideration.

Mr. Strauss: Could the Chancellor give a specific instance and say what the value for duty purposes is adjudged to be on Opel cars imported into this country?

Sir J. Simon: I was merely asked to state what was the basis of valuation, and I have done so. Application to a particular case is another matter.

Commander Locker-Lampson: Does it not look as though these cars came in at far below the original cost price?

Mr. Strauss: Would the Chancellor be able to give me an answer if I put down a further question?

Sir J. Simon: I am not really sure that it would be proper for me to reply.

COTTON INDUSTRY.

Mr. Chorlton: asked the President of the Board of Trade whether he will, in order to assist the export cotton trade, consider taking steps to arrange for a bounty based on the efficiency of the works concerned, as schemes already submitted do not hold out much hope of success owing to the amount of levy to be paid and the cost?

Mr. Stanley: I am afraid that there is nothing I can add to the replies previously given to my hon. Friend on the question of export bounties on cotton goods.

Mr. Chorlton: In the present unfortunate condition of the cotton trade is it not obvious that some compensation, monetary or otherwise, should be given to the exporter, and that otherwise the trade will never recover?

Mr. Stanley: My hon. Friend is, no doubt, aware that, quite apart from other considerations, complications would ensue in the Lancashire export markets if it could be said that exports were subsidised. I am not aware that such a bounty has even been proposed before.

WAR MATERIAL (ITALY).

Miss Wilkinson: asked the President of the Board of Trade what licences for the export of arms and war material to Italy have been granted during the last six months; and what was the total value of such exports?

Mr. Stanley: Three licences have been issued during the last six months for the export of arms and war material from the United Kingdom to Italy. As I have previously explained, His Majesty's Government consider that it is contrary to the public interest to publish particulars of licences issued for the export of arms and ammunition to particular destinations; but the total value of the arms, ammunition and military and naval stores registered as consigned from the United Kingdom to Italy from 1st November, 1937, to 30th April, 1938, was £302.

IRON AND STEEL INDUSTRY.

Commander Bower: asked the President of the Board of Trade to what extent the British Iron and Steel Federation has directly or indirectly committed itself to the purchase of foreign pig-iron and scrap, and over what period these quantities are likely to be delivered; what is the prospective output of pig-iron in this country; and the prospective consumption of pig-iron and scrap over the same period?

Mr. Stanley: I am informed that delivery of foreign pig iron purchased by the British Iron and Steel Federation was completed by the end of March last, and that the Federation is not committed to further purchases. As regards foreign scrap, a relatively small balance of the purchases made to meet the acute shortage which developed last year is expected to be delivered by July, and no further commitments have been made. In regard to the last part of the question, it is impossible to forecast with any precision the future demand for, and therefore the output of, pig iron, but it is estimated that home and Empire supplies will be adequate to meet any probable demand in the near future, and no difficulty is expected in obtaining adequate supplies of scrap.

Commander Bower: Is it not a fact that the very short-sighted policy of the federation in making these large purchases is responsible for enormous numbers of

blast furnaces being blown out at the present time, and for men being thrown out of employment?

Mr. Stanley: I do not think I could accept that description of the action of the Iron and Steel Federation, but the matter is one that can obviously be raised in the Debate on my Vote this afternoon.

Mr. David Grenfell: Is it not the case that this House supported import duties on imported steel on condition that the Iron and Steel Federation reorganised the steel trade and made provision for expansion of production and development at home to meet home needs?

Mr. Stanley: Yes, Sir, that is quite true. The federation have carried out a considerable amount of reorganisation. As the hon. Gentleman knows, the output last year was expanded enormously, and this particular condition was, I think, judged by most Members of the House to be wise at the time it was made, when there was an acute shortage of steel.

Miss Wilkinson: Does not this mean that the British Iron and Steel Federation are keeping up their own profits at the expense of the exclusion of new people from coming into the industry to fill up production?

Mr. Stanley: That does not seem to have much to do with the question on the Paper.

Mr. Kirkwood: Is the right hon. Gentleman aware that shipbuilding is being held up because of a shortage of light ship plates, which could be rolled at Jarrow at the moment; and if, on making inquiries, he finds that that is the case, will he push on with a steelworks that can meet the demand?

Mr. Stanley: If the hon. Gentleman will let me have particulars of that case, I shall be glad to look into it.

Miss Wilkinson: You have had the particulars over and over again.

Mr. Stanley: I understood the hon. Member to be referring to the case of a particular shipbuilder who is short of plates, and I told the hon. Member that, if he will let me have particulars, I shall be glad to look into it.

Mr. Kirkwood: It is not only the shipbuilder, but many.

Mr. Liddall: Is my right hon. Friend aware that ship plates can be got at Scunthorpe?

Mr. R. Acland: asked the President of the Board of Trade whether the Board has looked into the question of the number of firms in the iron and steel industry now making use of the uniform cost system worked out by the standing cost committee of the Industrial Research Council at the instance of the Iron and Steel Federation; and, if so, what is the position at the latest convenient date?

Mr. Stanley: I am informed by the British Iron and Steel Federation that they are satisfied that progress continues to be made in the adoption of the uniform cost system, either wholly or in part according to the particular needs of individual firms.

Mr. Acland: asked the President of the Board of Trade whether the council of the British Iron and Steel Federation has established a central stabilization fund; if so, on what basis and by whom are contributions paid to the fund; and how much has been expended out of the funds, and on what objects?

Mr. Stanley: I am informed that the fund to which the hon. Member refers has not yet been established, but arrangements have been made to defray, by means of a levy on the industry, the cost of the schemes carried out last year to meet the emergency created by the sudden expansion of demand.

Mr. Acland: asked the President of the Board of Trade whether any money has been spent since last November by the British Iron and Steel Federation in order to keep high-cost steel-producing plants in operation without necessitating a general rise in the price level of steel?

Mr. Stanley: I am informed that, apart from the arrangement referred to in my reply to a question by the hon. Member for Dundee (Mr. Foot) on 2nd November last, it has not been necessary for the British Iron and Steel Federation to make arrangements to keep any high-cost steel-producing plants in operation.

NEGATIVE CINEMA FILMS (IMPORTS).

Mr. Day: asked the President of the Board of Trade the countries or country of origin of all the negative cinema film imported into Great Britain and Northern

Ireland and registered for the 12 months ended to the last convenient date?

Mr. Stanley: As the answer involves a tabular statement, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the statement:

Table showing the quantity of negative cinematograph films imported into the United Kingdom during the year 1937, distinguishing the principal countries of consignment. Particulars of the countries of origin of these films are not available.


Cinematograph films— Negatives.
Thousand linear feet of the standard with of 1⅜ in.


Total imports
2,568


Of which consigned from:



United States
1,499


France
176


Germany
120


Union of South Africa
113


Irish Free State
101


Palestine
75


Egypt
71

NOTE.—These figures are provisional.

BALANCE OF TRADE.

Mr. H. G. Williams: asked the President of the Board of Trade whether, in view of the increasing adverse balance of visible trade, he will take steps towards the revision of the trade agreements made with any country with which the adverse balance is now larger than was the case when the agreement was drawn up?

Mr. Stanley: Certain special causes, such as rearmament expenditure and Government purchases of supplies, have operated to swell the adverse balance of visible trade; none the less, this balance was smaller last month than a year earlier. In the circumstances, I do not consider that any attempt at a wholesale revision of the trade agreements is called for, though the position in relation to particular countries is constantly watched.

Mr. Williams: Is not the increase in the adverse balance of trade entirely with foreign countries, and not with Empire countries; and can we do something with those foreign countries?

Mr. Stanley: I hope to deal with this matter in the Debate later. As a matter


of fact, the increase in the adverse balance of trade is entirely with one foreign country.

GERMAN MOTOR CARS (IMPORTS).

Sir Reginald Clarry: asked the President of the Board of Trade what is the horse-power of the majority of motor cars imported from Germany during the last four months; what is the horse-power of the majority of motor cars imported from other foreign countries during the same period; and what is the horse-power of the majority of cars manufactured in Great Britain?

Mr. Stanley: The information asked for in the first two parts of the question is not available from the trade returns of the United Kingdom, which do not distinguish the horse-power of motor cars imported. As regards the last part of the question, the majority of the private motor cars manufactured in this country are of between 8 horse-power and 12 horse-power.

Sir R. Clarry: asked the President of the Board of Trade whether he has made any estimate as to the amount of British labour which is displaced by the imports during the first four months of this year of 3,183 motor cars from Germany; and, if so, whether he will supply the information?

Mr. Stanley: I am advised that it would be impossible to make any reliable estimate.

CIDER (EIRE IMPORT DUTY).

Mr. Christie: asked the President of the Board of Trade whether he is aware that the duty on cider imported from the United Kingdom into Eire has recently been raised from is. 6d. to 4s. 6d. per gallon, a figure which is equivalent to a complete embargo; and whether he will make representations to the Government of Eire with a view to a modification of these duties?

Lieut.-Colonel Acland-Troyte: asked the President of the Board of Trade the increase of duty on cider that has recently been imposed by Eire; whether this increase was imposed after the signing of the Irish Agreement; and what action he proposes to take with regard to this matter?

Mr. Stanley: The duty upon cider of United Kingdom origin on importation

into Eire was raised from is. 6d. to 4s. per gallon by Budget Resolution on 13th May. While there is nothing in the Agreement with Eire which precludes an increase in this particular duty, the Agreement provides an appropriate remedy in the form of an application for a review of the duty by the Prices Commission. I am prepared to arrange for an early hearing of the case if the industry wish to pursue that course.

INDUSTRIAL UNDERTAKINGS, NORTHEASTERN AREA.

Mr. Magnay: asked the President of the Board of Trade whether he can make any statement about industrial undertakings recently started in the north-eastern Special Areas in connection with the Surrey Scheme?

Mr. Stanley: I have no official information about the Surrey Scheme, but I am told that it has been concerned in the establishment of four industrial undertakings in Jarrow and two in Gateshead; that these undertakings are already employing more than 1,200 men, a number which it is expected will increase substantially; and that their capital approaches £750,000. Three of these undertakings—a tube works in Jarrow, a works for the manufacture of steel and refined iron and certain finishing processes in Jarrow, and a works for the manufacture of pneumatic tools at Gateshead—have received assistance under the Special Areas (Amendment) Act, 1937, from the Commissioner for the Special Areas and from the Treasury under their powers under that Act, or from the Nuffield trustees, or from the Special Areas Reconstruction Association.

Mr. Magnay: While thanking my right hon. Friend for his answer, and the promise that it means for Tyneside, may I ask what proportion of this £750,000 has come from the Nuffield Trust and other sources?

Mr. Stanley: It is not the practice to give information as to the exact financial arrangements.

Mr. Magnay: Would I be correct in assuming that 25 per cent. has come from such sources?

Mr. Stanley: A considerable amount.

Miss Wilkinson: I did not catch the right hon. Gentleman's reply. Did I


understand him to say that on the Surrey Scheme 1,200 men were now being employed in Jarrow, or that it was hoped to employ 1,200?

Mr. Stanley: There are four undertakings in Jarrow and two in Gateshead, and on these 1,200 are being employed.

Miss Wilkinson: It is nothing like that now.

Miss Wilkinson: asked the President of the Board of Trade whether he is now in a position to make a statement regarding the proposed steelworks at Jarrow?

Mr. Stanley: The Commissioner for the Special Areas has entered by arrangement on that part of the Palmer's Yard site which is needed to enable a start to be made with the steelworks. He has now agreed the purchase price with the vendors, and the contract is being prepared. The lease of the site from the Commissioner to the proposed company has been prepared, and the few points which have been raised by the promoters of the company are now under discussion.

Miss Wilkinson: As it is impossible by way of question and answer to deal with this very complicated question that has arisen at Jarrow, I beg to give notice that I shall raise it at some convenient time. I hope I shall be allowed to do so on the Estimates to-day.

OIL DISCHARGES, BRISTOL CHANNEL.

Mr. Grenfell: asked the President of the Board of Trade whether his attention has been called to the serious damage caused by the discharge of oil around the coast of Gower, particularly at Port Eynon and Pwlldu; whether vessels using Bristol Channel ports are known to empty their oil tanks within or adjacent to the three-mile limit; whether any warning has been issued recently against this practice; and whether he will authorise a close watch upon vessels in the Bristol Channel so as to prevent the repetition of this serious offence and consequent injury to the fishing interests and the seaside amenities of the Bristol Channel?

Mr. Stanley: Yes, Sir. The recent pollution by oil off the coast between Port Eynon and Pwlldu was reported to my

Department by the coastguard and inquiries were at once instituted with a view, if possible, to ascertaining the source of the pollution. I have no information that vessels using Bristol Channel ports empty their oil tanks within or adjacent to the three-mile limit, but shipowners have been from time to time asked by the Chamber of Shipping to ensure that oil or oily water is not discharged within 50 miles of any coast. The last circular on this subject was issued in February, 1938. With regard to the last part of the question, I fear that it is not practicable to keep a close watch on vessels at a distance from the coast with the object of preventing such offences, but the coastguard have orders to be on the look-out and report any pollution and the name of any suspected ship.

Mr. Grenfell: Will the right hon. Gentleman consider the question of posting up notices at the entrance to the docks in Swansea, Cardiff and Newport with the object of putting a stop to the discharge of oil? Will the right hon. Gentleman also come with me to see the damage which is being done to this very beautiful coast?

Mr. Stanley: I will certainly consider the suggestion of the hon. Member.

Mr. Day: Could not some action be taken through the League of Nations?

Oral Answers to Questions — FISHING INDUSTRY.

LINE-THROWING APPARATUS.

Mr. Adamson: asked the President of the Board of Trade whether the approved line-throwing apparatus, as proposed by the Merchant Shipping Act, 1937, for fishing vessels, has undergone practical tests under severe wind and weather conditions, and whether any standard degree of accuracy is enforced before being approved?

Mr. Stanley: The rule proposed contains a specification of an approved line-throwing apparatus, together with details of the tests to be made before approval. As this matter is at present under consideration by the Merchant Shipping Advisory Committee, I will communicate with the hon. Member when I have received the committee's report.

Mr. Adamson: Is the right hon. Gentleman aware that where there is no standard laid down there is an opportunity for very big deviations from the general practice?

Mr. Stanley: These proposed tests were decided upon by me with the experience derived from the coastguard service. Any Amendment could, of course, be considered by this Advisory Committee, and I will bring the hon. Member's question to their notice.

GERMANY.

Mr. Adamson: asked the President of the Board of Trade whether, in view of the probability that the German quota for British herring will this year be very considerably reduced, he is prepared to consider a reduction of the landing of white fish from German fishing vessels in British ports under existing arrangements as a consequence?

Mr. Stanley: I understand that the representatives of the United Kingdom and German herring industries have been negotiating an agreement regarding supplies of cured herrings to the German market which will be in the interests of both parties. I should point out, however, that the amount of United Kingdom herring which may be imported into Germany depends on the amount of sterling provided under the Anglo-German Payments Agreement of 1st November, 1934, by German exports to the United Kingdom. As regards the last part of the question, the whole problem of the regulation of imports of white fish from foreign countries is at present under consideration.

Mr. Henderson Stewart: Has the right hon. Gentleman any information as to the possibility of marketing fresh herring in Germany, which would be very important?

Mr. Stanley: I could not answer that question offhand, especially as the agreement applies to cured herring.

LIFE-SAVING APPLIANCES.

Mr. Adamson: asked the President of the Board of Trade whether the proposed amended rules in respect of life- saving appliances for fishing vessels under the provisions of the Merchant Shipping Act, 1937, will be submitted for further consideration to organisations representative of the fishing industry prior to their final adoption?

Mr. Stanley: The proposed new requirements, which are now before the Merchant Shipping Advisory Committee, have already been fully discussed with representative organisations and it is understood that those organisations are in substantial agreement with the proposals. Should they desire, however, to make further representations on the subject, I shall be happy to consider them.

Mr. Adamson: Will this Order be placed before the House for final approval?

Mr. Stanley: This Order is made under the Merchant Shipping Act, but I do not remember offhand whether it has to come before the House. I will let the hon. Gentleman know.

CHEMICAL RESEARCH.

Mr. David Adams: asked the Chancellor of the Duchy of Lancaster, as representing the Lord President of the Council, whether his attention has been drawn to the fact that in case of war the British Empire would be without access to important chemical compounds of which Germany has a virtual monopoly; whether he is aware that German firms producing these chemical agents do not as a rule grant licences for manufacture in this country; and whether any Government action is contemplated in view not only of possible war-time contingencies, but also of the continuous and urgent needs of the British tropical Empire?

The Chancellor of the Duchy of Lancaster (Earl Winterton): The Lord President is well aware of the fact that the discovery of new chemical compounds of certain kinds, particularly those which can be used in the treatment of some tropical and other diseases, at present depends largely on research work undertaken by industrial concerns in Germany, with the consequence that supplies of these new substances can for a longer or a shorter period be obtained only from abroad. It is for this reason that the Government have approved the proposal of the Medical Research Council for expenditure at the rate of £30,000 per annum on research in chemotherapy, to enable this country to play a greater part in future in making new discoveries in this field. The object and nature of the new scheme were explained in the


" Report of the Medical Research Council for the Year 1936–1937," which was laid before Parliament in February of this year. (Cmd. 5671.)

Mr. Adams: Is the Minister satisfied with this small sum of £30,000 a year? Is it at all equal to the requirements of the situation?

Earl Winterton: since questions were asked on this subject a week ago I went into the matter very carefully with the Lord President's Department and the Medical Research Council, and the answer to the hon. Gentleman's question is that there are other grants in connection with this research, in addition to this new sum of money, which will, for the first two years, be expended largely in making new premises for the Council. The result will be greatly to enlarge the field of research.

Mr. Adams: Do I understand that the Government are satisfied that enough is being done?

Earl Winterton: I am concerned only with the particular question of research. Questions of supply should be addressed to the Board of Trade. In this question of research I am satisfied, and so is the Lord President's Department, that, for the moment, sufficient is being done. The matter can be reviewed at some future date.

HYDROCARBON OIL DUTIES.

Mr. De la Bère: asked the Chancellor of the Exchequer whether he is prepared to consider some form of relief or concession to the road transport contractor in view of the increased tax on petrol and fuel oil for use in road vehicles, and of the desirability of maintaining transport in all areas in the event of emergency?

Sir J. Simon: I am unable to consider any measure which would be equivalent to the sacrifice of part of the additional revenue for which I am relying upon the increase in the hydrocarbon oil duties.

Mr. De la Bère: Does the right hon. Gentleman fully understand the difficulty of road hauliers and the penalties which they are called upon to shoulder, and is not the present position utterly unjust?

Mr. Speaker: That matter does not arise out of the question on the Paper.

WAR RISKS INSURANCE.

Mr. De la Bère: asked the Chancellor of the Exchequer whether the Government will consider giving a Treasury guarantee both as to principal and interest to a limited liability company formed for the specific purpose of meeting the public demand for insurance against air-raid damage, such company to be constructed on similar lines to the Railway Finance Corporation?

Sir J. Simon: No, Sir.

Mr. De la Bère: Are the Government not aware, that in the national interest, some form of safeguard for insurance against air raids should be created in this country, and is the right hon. Gentleman not aware that at the moment there is nothing what can be of any real service to answer this purpose?

Sir J. Simon: The hon. Gentleman's question had to do with the Railway Finance Corporation. I do not think the case is in the least analogous.

Mr. De la Bère: Is it not a fact that what can be done for one side can be done for all and that if it can be done for the railways it can be done for agriculture in air-raid precautions?

Mr. Kirkwood: asked the Financial Secretary to the Treasury whether, in connection with the preparatory work for an insurance scheme to cover damage to property by enemy action in time of war, he will consider a scheme of life insurance, so that families bereaved of a breadwinner in these circumstances may not be rendered totally destitute?

The Vice-Chamberlain of the Household (Mr. Grimston): I have been asked to reply. The hon. Member may rest assured that the question of compensation for personal injuries arising out of enemy action is not being overlooked. The position in this matter is similar to that with regard to the question of compensation to property owners, upon which my right hon. Friend the President of the Board of Trade made a statement on 17th May in reply to a question by the hon. Member for Sunderland (Mr. Storey).

Mr. Kirkwood: Does not the hon. Gentleman realise that this case is not similar to that of the destruction of property? This is a more serious matter,


dealing with human life; and will the Government have regard to that fact?

Mr. Grimston: I will convey the remarks of the hon. Gentleman to my right hon. Friend.

Oral Answers to Questions — MERCANTILE MARINE.

SPAIN.

Wing-Commander James: asked the President of the Board of Trade how many ships sailing under the British flag have been engaged in frequent voyages to ports upon the East Coast of Spain during the last 12 months; and how many of these have acquired British nationality since the civil war began?

Mr. Stanley: So far as my information goes, some 140 British ships have made repeated voyages to Spanish Government ports in the Mediterranean within the last 12 months. Of these, some 27 acquired British nationality since the outbreak of the Spanish civil war.

Wing-Commander James: asked the President of the Board of Trade how many ships belonged to the Stanhope Shipping Company before the start of the Spanish civil war, and how many it now owns?

Mr. Stanley: Before the start of the Spanish civil war, the Stanhope Steamship Company, Limited, owned two ships, and at the present time they own 19.

Wing-Commander James: asked the President of the Board of Trade when a concern trading as the Mid-Atlantic Ship ping Company, and now engaged in running ships to ports in Republican Spain under the British flag, was formed; who are its directors; and what is their nationality?

Mr. Stanley: The Mid-Atlantic Shipping Company, Limited, was incorporated under the Companies Act on 21st July, 1937, and its directors are:
Jose Ignacio Aldama (Spanish).
Edward Leader Burbidge (British).
Marino de Gamboa (American).

FOREIGN COASTING VESSELS.

Mr. Shinwell: asked the President of the Board of Trade the number and total tonnage of foreign coasting vessels trading between United Kingdom ports?

Mr. Stanley: The precise number of foreign vessels engaged in the British coasting trade during any year is not known, since the navigation returns furnished to the Board of Trade include the repeated voyages of the vessels concerned. These returns show that during the year 1937 the aggregate of the arrivals and departures with cargo of foreign vessels in the coasting trade of the United Kingdom was 4,262 vessels and 835,000 tons net.

Mr. Shinwell: Do the figures indicate an increase?

Mr. Stanley: Yes, Sir; there was a very slight increase. for the first four months of 1937 the percentage was 1.8 and for the first four months of 1938 it was 1.9.

Mr. Shinwell: asked the President of the Board of Trade the manning regulations on foreign coasting vessels trading between United Kingdom ports; and how these regulations compare with those laid down by the National Maritime Board?

Mr. Stanley: The hon. Member will find certain information in the reports of the International Labour Office on Hours of Work on Board Ship and Manning, published in 1935 and 1936, and I doubt whether it is practicable to get any better information on what is a very local and varied activity of shipping.

Mr. Shinwell: Are not the manning regulations for foreign coasters at a low level compared with our vessels?

Mr. Stanley: That is very hard to determine, because conditions vary so much as between one kind of coasting ship and another. The hon. Gentleman did ask a question, and I did refer him to the attempts that have been made to obtain information.

NAVAL AND MILITARY PENSIONS AND GRANTS.

Sir John Smedley Crooke: asked the Minister of Pensions the number of War widows who have been deprived of their pensions on the ground that they have been judged unworthy during the three years 1935, 1936, and 1937?

The Minister of Pensions (Mr. Rams-botham): The total numbers of widows


whose pensions have been forfeited on the grounds of misconduct during the calendar years 1935, 1936 and 1937, were 292, 237 and 170 respectively.

Mr. Kelly: Were these widows faced with their accusers?

Mr. Ramsbotham: I cannot possibly say without notice.

Mr. Davidson: In view of the large number of cases as stated by the Minister, would it not be advisable for a full opportunity to be given to those accused women of knowing all the evidence against them?

Mr. Ramsbotham: Perhaps the hon. Member will put down that question at a later date.

Sir T. Moore: Will restoration be given to these widows in any circumstances?

Mr. Ramsbotham: That depends on the circumstances.

Sir J. Smedley Crooke: asked the Minister of Pensions whether he is satisfied that the present procedure of securing evidence on which decisions are made depriving war widows of their widows' pensions on the ground that they have been or are unworthy, is strictly fair; and, as at present too much dependence is placed on evidence submitted to his inspectors by neighbours who may not always be friendly disposed, he will consider the advisability of revising the procedure in such a way as to remove doubt in the matter?

Mr. Ramsbotham: I am satisfied that the inquiries which are necessarily made in this class of case are properly carried out. The assumption in the second part of the question is not correct. In dealing with cases which fall within their jurisdiction, the Special Grants Committee carefully weigh all the information available, and the decision of forfeiture is not declared without the Committee being fully satisfied on the evidence as to the facts that it is justified.

Sir J. Smedley Crooke: Is my hon. Friend aware that this matter is causing widespread indignation and concern, and can he say why these War Widows are not allowed to face their accusers, as is done in every court of justice?

Mr. Ramsbotham: I have been very carefully into the work of the Special Grants Committee, and I am fully satisfied that it is carried out with complete justice to those concerned. It is not correct to speak of widows as being accused. They come before the War Pensions Committee, which exists to help the widows and see that complete justice is done.

Mr. Kelly: May we know the type of person who is engaged in gathering up this so-called evidence against the accused widows?

Mr. Thurtle: Is the Minister aware that these decisions are often determined by bitterly prejudiced spinsters?

Mr. Holdsworth: Would the hon. Gentleman consider meeting Members of every party in this House, and letting them state to him the experiences they have had?

Mr. Ramsbotham: I shall be glad to do so.

OXFORD UNIVERSITY (ACTION SETTLEMENT: TRIBUNAL).

Mr. Bellenger (by Private Notice): asked the Minister of Agriculture whether he has now come to any decision with regard to the request made by the University of Oxford for a contribution out of public funds towards the sum of £70,000 agreed to be paid by the University to Sugar Beet and Crop Driers, Limited?

The Minister of Agriculture (Mr. W. S. Morrison): Yes, Sir, I have now decided, in consultation with my right hon. Friend the Chancellor of the Exchequer, to appoint a tribunal consisting of Lord Fleming (a judge of the Court of Session in Scotland), Sir Henry Bunbury (late Controller-General of the Post Office) and Mr. Lawrence Durning Holt (sometime Chairman of the Chamber of Shipping), with the following terms of reference:
 To consider the circumstances leading up to the claim of Sugar Beet and Crop Driers, Limited, William James Mallinson and the Grange Estates, Limited, against the Chancellor, Masters and Scholars of the University of Oxford, and to advise upon the representations of the University that the sum of,£75.000 paid in settlement of the action should not be wholly borne by their funds but should be met in part by a contribution from public funds by reason of the fact that a measure of responsibility in connection with the claim rests upon the Ministry of Agriculture and Fisheries; and


if so, to advise what sum ought, in fairness and reason, to be paid to the University from public funds.

Mr. Bellenger: While welcoming the right hon. Gentleman's decision to set up this tribunal, may I inquire whether the report of the tribunal will be available in due course to hon. Members, as this is a matter of considerable public interest?

Mr. Morrison: I would rather await the event. It is advisable to make no statement in advance, as it might prejudice the findings of the tribunal.

Commander Locker-Lampson: How long will the deliberations take?

Mr. Morrison: I cannot say, but, from my knowledge of the personnel of the Commission, I am confident that they will conduct it as expeditiously as possible.

DEBATES (ATTENDANCE OF MINISTERS).

Mr. Attlee (by Private Notice): asked the Prime Minister whether is attention has been drawn to the absence from the Front Bench of any Cabinet Minister during the proceedings on the Air Navigation Bill last night; and whether steps will be taken to see that in future a responsible Minister is in attendance for all Debates?

The Prime Minister (Mr. Chamberlain): Yes, Sir. My attention has been called to the subject matter of the right hon. Gentleman's question. Unfortunately, my right hon. Friend the Secretary of State for Air was called away on urgent business affecting the work of his Department: otherwise, he would have been in his place. It has always been, and will continue to be, my practice that, as far as circumstances permit, Cabinet Ministers should be present during Debates in this House.

Mr. Attlee: While one realises that a Minister may be called away for some particular purpose connected with his Department, there are other Ministers; and very often lately the Front Bench has been left represented by an Under-Secretary or two, and a few Whips, and the Patronage Secretary has been in charge. The point I am putting is that there ought to be some Cabinet Minister,

responsible to this House, to conduct the business of the Government.

The Prime Minister: I think I can add little to what I have said. It is the general intention that Cabinet Ministers should be available on all occasions during Debates, but it is impossible to give a binding undertaking that there should always be a Cabinet Minister present. I should not like to make any engagement now which might possibly bind one who may occupy my position hereafter.

Mr. Wedgwood Benn: Has the attention of the right hon. Gentleman been called also to the proceedings on Friday, a Private Member's Day, when the Chief Whip came down and moved the Adjournment, and then absented himself and connived at two unsuccessful attempts to count out the House?

The Prime Minister: Perhaps the right hon. Gentleman has omitted to state that no notice was given of his Motion.

Mr. Benn: May I ask the Prime Minister and the Leader of the House whether he does not consider that notice handed in at the Table and printed on the Order Paper is sufficient notice? Do not Ministers read their Order Paper?

The Prime Minister: The right hon. Gentleman has had a very long experience of this House and knows that it is a general matter of courtesy to give notice of his intention.

Commander Bower: As the question of last Friday has been mentioned, may I point out that I tried to count out the House without any encouragement, or help or communication with the Whips on this subject?

NEW MEMBER SWORN.

Sir Herbert Stanley Reed, K.B.E., LL.D., for the County of Bucks. (Aylesbury Division).

BILL PRESENTED.

MENTAL DEFICIENCY BILL,

"to extend by one month the time within which the Board of Control are required by section eleven of the Mental Deficiency Act, 1913, to determine whether orders made under that Act are to be continued; and to validate orders purporting to have


been continued under that section," presented by Mr. Elliot; supported by the Attorney-General and Mr. Bemays; to be read a Second time To-morrow, and to be printed. [Bill 159.]

OFFICIAL SECRETS ACTS (AMENDMENT).

Mr. Dingle Foot: I beg to move,
 That leave be given to bring in a Bill to amend Section Six of the Official Secrets Act, 1920.
As many hon. Members already know, there is a widespread anxiety both among the Press and the public at the use recently made of the powers contained in the Official Secrets Acts. Some day I hope that the whole of the provisions of these Acts will again come under the review of this House, but at the moment I am concerned only with Section 6 of the Act of 1920. That Section provides inter alia that
 It shall be the duty of every person to give on demand to a chief officer of police, or to a superintendent or other officer of police not below the rank of inspector …any information in his power relating to an offence or suspected offence under 
either of the Official Secrets Acts. There are a number of offences under these Acts, but the only one to which I need now refer is under the Act of 1911, and that is the unauthorised disclosure by a person holding office under His Majesty of information to which he has had access by reason of his official position. The phrase "person holding office under His Majesty" includes not only civil servants, but has recently been held to include every member of the police. The provisions of Section 6 provides, as the Home Secretary himself admitted a few days ago, "exceptional and drastic powers of interrogation." Nothing quite like them exists anywhere else in the whole range of our criminal law.
I would remind hon. Members of the circumstances in which these powers were first conferred. When the Act of 1920 was passed, great alarm was expressed, in particular, by the newspaper Press. It was thought that there might be same interference with the normal activities of journalists, and that, in fact, has proved to be the case. When Section 6 was under consideration in this House the Attorney-General of the day, who was

conducting the Bill through the House, said:
 We are dealing only with offences or suspected offences under the principal Act or this Act. In other words, to put it shortly, we are dealing with spying and attempts at spying.
I do not say that those words constituted an undertaking that the powers conferred would not be used to their fullest extent, but I do say that it is abundantly clear that the House of Commons passed this Section in the belief that they were striking only at espionage. Everyone knows now that Section 6 has, in fact, been invoked in cases which, by no stretch of the imagination, could be connected with spies or spying, or could be said to involve in any way the safety of the State. In particular these powers have been used on several occasions to demand from journalists the sources of their information. I do not underrate the assurances that were given to this House 12 days ago by the Home Secretary. We were told that in future these powers were to be used only in cases where the information which was believed to have been disclosed was of serious public importance. These very words make it clear that the use of the Section will not be limited to the original purposes envisaged by this House. In 1920, when this Act was under discussion, the "Times" published a very striking leading article, attacking the Measure and concluding with these words:
 If we are to have legislation on the Press, let it not be mixed up with penal provisions aimed at spies and revolutionaries.
There has been, as we know, a great deal of alarm in the Press, but it is not only the Press that is threatened by powers of this kind. They might even affect Members of this House. Suppose a Member of this House, in the course of debate, made certain assertions from which it was suspected, reasonably or unreasonably, that he had been the recipient of an unauthorised disclosure by a person holding office under His Majesty, he might the next day be approached by a superintendent of police holding a copy of the OFFICIAL REPORT and be required to state the source from which he obtained his information. If he refused, he would have committed an offence and would be liable to imprisonment for a maximum of two years. [HON. MEMBERS: "NO."] It is perfectly clear under the terms of the Act, and no plea of Parliamentary Privilege


would avail him in any way, because the offence would consist not in any words spoken in this House, but simply in the refusal to give the source of his information.
There are three Amendments that I am now proposing to Section 6 of the Act of 1920. First of all I am proposing that these powers of interrogation shall not be exercised without the express permission of one of the Law Officers or of the Home Secretary. Secondly, I am proposing that persons interrogated shall not be bound to answer questions the answers to which might have a tendency to expose them to a criminal charge; and, thirdly, the Bill provides that it shall not be an offence to fail to give information unless there are reasonable grounds for believing that the information relates to matters affecting the safety of the State or that there has been an unauthorised disclosure of information, by persons holding office under His Majesty, for purposes prejudicial to the safety of the State. The first Amendment would simply give statutory form to the assurances given to us by the Home Secretary 12 days ago. The second Amendment is essentially a reasonable one, because it would give the same protection to the person interrogated that we already give to a witness who is giving evidence in any court of law. Moreover, it is a similar provision to that which already appears in the Indian Criminal Procedure Code, where also there are certain statutory obligations to give information. Surely it is reasonable to ask that His Majesty's subjects in the United Kingdom should at any rate have the same safeguards as His Majesty's subjects in British India.
My third Amendment is designed to restrict the operation of this particular Section to the purposes originally intended by this House. If the Bill becomes law this method of inquiry, which is made possible by Section 6 of the 1920 Act, will remain unimpaired in all cases where the safety of the State is in any way involved; we are not concerned with that at all; but the Bill would have the effect of preventing these quite exceptional powers of inquisition from being used for entirely different purposes which neither the authors of the Official Secrets Acts nor either House of Parliament ever contemplated or desired.

Mr. Thorne: I would ask you Mr. Speaker, whether you can give us

guidance on what I think is a legal question? The hon. Member for Dundee (Mr. Foot) has just made a statement to the effect that in accordance with the Official Secrets Acts, 1920, if a member makes a statement in this House he is not privileged at all.

Mr. Foot: I did not say that.

Mr. Thorne: I was led to understand long ago that every Member of this House is privileged, whatever statement he makes.

Mr. Speaker: I have not even seen the Bill yet.

Question put, and agreed to.

Bill ordered to be brought in by Mr. Foot, Mr. Davidson, Mr. Baxter, Mr. Pritt, Mr. Kingsley Griffith, Mr. Harvey, Mr. Kirkwood, Mr. Acland, and Mr. Cary.

OFFICIAL SECRETS ACTS (AMENDMENT) BILL,

" to amend section six of the Official Secrets Acts, 1920," presented accordingly, and read the First time; to be read a Second time upon Tuesday next, and to be printed. [Bill 160.]

LOCAL AUTHORITIES AND LOCAL GOVERNMENT OFFICERS (JOINT COUNCILS) BILL.

Order for Second Reading upon Thursday read, and discharged: Bill withdrawn.

DIVORCE AND NULLITY OF MARRIAGE (SCOTLAND) BILL.

Reported, with Amendments, from the Standing Committee on Scottish Bills.

Bill, as amended (in the Standing Committee), to be considered upon Thursday, and to be printed. [Bill 158.]

Minutes of Proceedings to be printed. [No. 121.]

LEE CONSERVANCY CATCHMENT BOARD BILL.

Reported, with Amendments, from the Committee on Group G of Private Bills.

Bill, as amended, to lie upon the Table.

SELECTION (WELSH CHURCH (AMENDMENT) BILL [Lords] SELECT COMMITTEE).

Colonel Gretton reported from the Committee of Selection; That they had nominated the following Three Members to serve on the Select Committee on the Welsh Church (Amendment) Bill [Lords]: Major Colfox, Sir George Davies, and Mr. Grenfell.

STANDING COMMITTEE B.

Colonel Gretton further reported from the Committee: That they had added the following Ten Members to Standing Committee B (in respect of the Local Government (Hours of Poll) Bill): Mr. Doland, Mr. Dodd, Mr. Hely-Hutchinson, Mr. Kelly, Mr. Lee, Mr. Lloyd, Mr. Palmer, Mr. Parker, Sir Stanley Reed, and The Solicitor-General.

SCOTTISH STANDING COMMITTEE.

Colonel Gretton further reported from the Committee: That they had added the following Ten Members to the Standing Committee on Scottish Bills (in respect of the Nursing Homes Regulation (Scotland) Bill): Captain Cobb, Mr. De la Bère, Mr. Grant-Ferris, Mr. Higgs, Sir

Year ended
Police Division.
Number of cases tried.
Number of persons proceeded against in respect of the foregoing cases.
Number of persons convicted.
Total amount of fines imposed.
Total amount of fines recovered.








£
s.
d.
£
s.
d.


31st March, 1936
…
Central
10,260
12,316
11,637
7,927
2
0
5,469
2
3




Marine
2,676
3,375
3,127
1,636
18
0
1,282
1
0




Eastern
2,292
3,242
2,922
1,746
18
0
1,466
8
0




Southern
2,379
2,951
2,678
1,815
6
6
1,512
12
0




Northern
3,119
4,439
3,897
2,127
15
0
1,679
6
9




Mary hill
4,037
5,292
5,051
2,497
1
0
2,347
18
8




Govan
1,966
2,740
2,354
1,141
12
0
743
9
8


31st March, 1937
…
Central
10,588
12,876
12,012
8,577
15
6
5,913
17
2




Marine
2,852
3,366
3,154
1,810
0
6
1,445
9
6




Eastern
2,234
3,206
2,879
1,649
0
6
1,388
3
6




Southern
2,464
2,944
2,679
1,654
11
0
1,383
12
0




Northern
3,140
4,643
4,184
2,527
5
0
2,268
7
0




Maryhill
3,789
4,841
4,530
2,447
17
6
2,178
11
11




Govan
2,186
3,270
2,930
1,589
16
6
1,144
14
7


31st March, 1938
…
Central
11,358
14,045
13,077
8,826
6
0
6,394
11
8




Marine
3,836
4,419
4,177
2,394
7
0
1,848
18
0




Eastern
2,454
3,719
3,429
1,935
2
6
1,680
11
6




Southern
2,602
3,105
2,911
2,091
8
6
1,698
16
0




Northern
3,403
4,800
4,244
2,625
10
6
2,388
0
4




Maryhill
3,620
4,640
4,355
3,480
11
0
3,091
7
5




Govan
2,557
3,557
3,159
1,584
4
1
1,101
8
11

George Jones, Mr. Harold Macmillan, Sir Mervyn Manningham-Buller, Mr. Moreing, Sir Arthur Salter, and Mr. Samuel.

Reports to lie upon the Table.

MESSAGE FROM THE LORDS.

That they have agreed to,—

Bournemouth Corporation (Trolley Vehicles) Provisional Order Bill, without Amendment.

Orders of the Day — SUPPLY.

[7TH ALLOTTED DAY.]

Considered in Committee.

[Captain BOURNE in the Chair.]

CLASS VI.

BOARD OF TRADE.

Motion made, and Question proposed,
 That a sum, not exceeding £211,444, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and expenses of the office of the Committee of Privy Council for Trade, and subordinate Departments, including certain services arising out of the War."— [Note.—£109,000 has been voted on account.]

4.5 p.m.

The President of the Board of Trade (Mr. Oliver Stanley): I must confess that the proceedings in the last few minutes have tended to put rather a damper on any speaker in this House; and I only hope that such will be my reticence in the course of my speech that I shall have no reason to fear any of those obscure terrors which the hon. Member for Dundee (Mr. Foot) threatened. It has been the custom of my predecessors, on the first occasion when the Board of Trade Vote is discussed in this House, to start by making a general survey of the course of trade during the year that has passed and the prospects of trade as they are at the moment. It is a practice which the Committee appreciates, and it is one which I intend to follow. But I must confess that when I was preparing my speech I found difficulty, not in knowing what to say but in knowing what, in such an enormous range as is covered by my Department, to leave out. I am sure that hon. Members will appreciate that if there are many matters to which I do not refer and which I leave to them to be raised in Debate so that they can receive an answer at the close, it is not because I do not think them important; it is merely because there is not time to cover all subjects. With regard to one matter of particular importance, which hon. Gentlemen opposite, I know, want to discuss—that is the question of coal—I shall not refer to it at all

in my speech, as my hon. Friend the Secretary for Mines will intervene in the Debate later in order to deal with points that have been raised upon that subject.
It is just about 12 months ago that my predecessor, Lord Runciman, addressed this Committee on an occasion similar to this. In the course of that address he was able to give not only an extremely encouraging report of the year that was past but to express optimistic views as to the future. Indeed, the period in which he spoke, the spring of last year, was a period of the most intense industrial activity. In almost every branch of industry in this country orders were pouring in, but, as many realised at the time, those orders were not necessarily based on the actual level of consumption, but to a large extent were based on forecasts of increased consumption in future. The result was that not only was current production high, but order books were full. To some extent that very activity bore within it the seed of its own decline. The activity was of too feverish a character. Many of the orders being booked at that time were not really genuine orders, in this sense—there are examples which hon. Members in all parts of the Committee will know of—that they were based neither on the needs of the consumer at the moment nor indeed on the anticipated needs of the future, but were based very often on the fact that it was difficult to get delivery of more than a proportion of the orders that were placed, and the orders therefore were proportionately swollen in order to get the delivery which was required.
The results which have occurred in the 12 months which have passed, certainly as far as the year 1937 taken by itself is concerned, fully justified the prophecies of Lord Runciman. The year 1937, quite apart from certain weaknesses which developed towards the close of the year, was on the whole an extremely prosperous one for British trade. There was hardly a section of industry which was not able to increase its production, which was not able to increase its profits, where wages did not tend to go up, and where therefore the year contributed to the strengthening of that industry for the future.
I shall follow the course of previous speakers in my position by giving certain general figures for the year, figures of the


kind which are used as the thermometer of industrial health. But I feel that it would be trifling with the Committee if I did not at the same time give some corresponding figures for the first four months of this year, to bring the industrial picture up to date, because although 1937 by itself was a good year, in the first four months of this year there has been, as the Committee generally knows, not only a certain slackening in the rate of increase of production that was going on before, but in some trades an actual decline. Before the discussion to-day the Committee will need not only the figures of last year, but the figures of the first four months of this year.
Take first of all the question of employment. The number of insured persons in employment in Great Britain in December, 1937, was 11,437,000. That is 200,000 more, on a comparable basis, than there were in December, 1936. The number last month was 11,390,000. That is 130,000 less than the year before, but still, of course, 2,200,000 more than in September, 1932, the lowest point of the depression. The numbers unemployed last month were nearly 300,000 more than a year ago.
Another test of the industrial activity of the country is that of railway receipts. Last year the total railway receipts were 4.5 per cent. more than in 1936, the increase being rather greater for goods traffic than it was for passenger traffic; but it is, of course, true that during at any rate some part of the year there was an increase in the rates charged, which makes a comparison with the previous year a difficult one. In the first 16 weeks of this year, however, the total railway receipts are only 0.8 per cent. more than in the corresponding period of 1937, and that in spite of the increased railway rates to which I have referred. Passenger receipts were 2.7 higher but goods receipts were 0.5 per cent. less. That tendency to decline has been a tendency which I am afraid has not been stable during the whole four months, but has declined at an increased rate over that period.
Another set of figures which is a very valuable test is to be found in the postal receipts. They were 4.3 per cent. greater in 1937 than they were in 1936, but in the first four months of this year they were only 0.4 per cent. above the

corresponding period of last year, disclosing not a decline from what already was a very high level of activity last year, but a distinct slowing down of the rate of progress. The same thing can be said of the figures of the retail trade. The money value of sales was 7½3 per cent. more last year than in 1936. That increase was shared by all the areas except a comparatively small area in Central and West London. This area is, of course, quickly affected by movements on the Stock Exchange, and the decline in Stock Exchange activities which began last summer very quickly had a marked effect on these particular districts. The precise extent to which the increase in the money value of sales was due to an increase in the volume of purchases or to price movements is difficult to estimate accurately from the data available, but it is clear that the volume of retail sales did increase last year and has in fact increased over each of the last four years. During the first four months of this year the increase has still continued, but at a lesser rate as compared with the 7½3 per cent. of last year. The rate of increase in the average daily sales this year is 4.1 per cent., an indication, therefore, of some slackening in the rate of increase.

Sir John Wardlaw-Milne: Over 1936?

Mr. Stanley: The increase was 7·3 per cent. last year over 1936.
As regards the figures of industrial production there was last year nearly a 7 per cent. increase over the preceding year, following an increase of 9·5 per cent. in 1936 and 7 per cent. in 1935.

Mr. Aneurin Bevan: Does that mean that there has been an increase of 9 per cent. in capital production and an increase of 4.1 in consumption trades?

Mr. Stanley: There has been an increase of 7 per cent. in industrial production and an increase of 7·3 per cent. in retail trade.

Mr. Bevan: The distinction which is important is that it would appear that consumption trades have only increased by 4.1 per cent., while production trades have increased by 7 to 9 per cent.

Mr. Stanley: The 4.1 per cent. is an increase in the retail sales for the first four months of this year. I am dealing


now with industrial production and giving the figures for last year when there was an increase of 7 per cent. over the year before. For the first quarter of this year industrial production is about 1 per cent. greater than a year earlier. That was a period of great activity. Retail sales show an increase smaller than that of last year. I do not think it is possible to draw conclusions between the two sets of figures of industrial production and retail trade, which the hon. Member seeks to draw because it leaves out the whole question of the export trade. With regard to external trade, last year the value of imports and exports was higher than any year since 1930. The value of imports was 21 per cent. greater than in 1936 and the value of exports 18 per cent. greater. Prices last year were considerably higher than in 1936, the rise being greater for imports than for exports, with the result that the increase in the volume of exports, 9½5 per cent., was greater than the increase in the volume of imports, 6 per cent.
I do not want to develop these figures or the corresponding figures for the first four months of this year because I hope later to deal with the extremely important and delicate question of the balance of-trade. It appears to me, from the figures I have given, that although production for the first quarter of this year still compares quite favourably with the very active period of the same time last year, yet in general the rate of increase has slowed down, and we all know that in certain particular industries not only has the rate of progress slowed down but that there has been an actual decline. What I think we are all asking is what is the reason why Lord Runciman's prophecy as to the year 1937 was quite correct and why it is that a longer optimistic view has proved not so accurate? The answer I am sure which comes at once to anyone who studies the question at all is the fall in commodity prices.
The fall in commodity prices coincided almost exactly with the first signs of any weakness in any of the industries of this country. In the spring of 1937, as hon. Members will recollect, commodity prices everywhere had an enormously feverish rise; using the "Economist's" figures they reached in the months of February and March last year the high total of 181.9 as compared with something like

140 for the average for 1936, and there were distinct signs not only here but in America that something more than a process of industrial consumption was causing this very violent increase, and that in fact a good deal of speculation was to be found in the commodity market. In these circumstances it was inevitable and indeed desirable that there should be some fall from an artificially exaggerated level. Hon. Members will recollect that the President of the United States gave public expression to the view in the spring of last year that the level of commodities was too high and should come down. Some fall, therefore, was both inevitable and desirable, but, once started, that fall has gone beyond the point where it was desirable to a point where by the uncertainties it has created and the losses it has made, it has had a serious effect upon world trade as a whole.
It seems to me that there are two main causes why this commodity fall was not arrested at the proper level and has continued its extremely disadvantageous decline. The first circumstance is the war between China and Japan. I think that has had a much greater effect on commodity prices and world trade than is fully realised by people in this country. It has had an effect both from the angle of China and from the angle of Japan. As far as China is concerned, over a period of two or three years she has been providing a market, not a great market but an increasing market for our export goods, and many of us, impressed by the new life in China, by the new organisation, by the greater security and by the prospects of raising the standard of living, were looking to this immense market as a possible solution of many of the export difficulties of this country and of other countries in the world. Of course, the effect of war upon hopes of that kind have been immediate and disastrous. Total exports fell from £3,880,000 in the first half of last year to £2,000,000 in the second half. For the first quarter of this year they are still on a low level. That, of course, is the obvious and direct damage done to our trade by this particular dispute.
What is less definite but just as important is the effect from the angle of Japan. Almost from the commencement of the dispute, certainly from the time it developed into a large-scale war, Japan


has had to impose drastic import regulations. These import regulations were described as a restriction upon luxury imports. Anyone who considers the figures will see that in fact they go far beyond that and impose restrictions on and lessen the consumption of many of the primary commodities. Of all the figures the one which is most impressive and gives the best idea of what they have done to the general trade of the world is the figure for cotton. In the first three months of this year as compared with the first three months of last year the value of imported cotton has fallen from 345,400,000 yen to 73,700,000 yen, a reduction to something like 20 per cent. in the imports of cotton to Japan. We can all see what the ultimate effect of that reduction may be on Japan as an exporting country and the effect it may have on those who compete with her in the cotton markets, but the one immediate result of such a drastic reduction of purchases is to accentuate the decline in the raw material, to make more uncertainty and to add to the great difficulties of those who are conducting that trade. If I have given the cotton figures the wool case is almost as startling. Hon. Members know that exactly the same is the case of wool, and that it was the action of the Japanese buyers on the Australian wool sales last autumn which began the decline in the price of wool which in the last few years had appeared to have been arrested.

Mr. Holdsworth: Can the right hon. Gentleman give us the quantity; the amount is not altogether satisfactory. If we are to judge as to the effects we should have the weight.

Mr. Stanley: I cannot give the weight. The figures I have given were taken from the extremely interesting article in the "Times" the other day. It is, of course, possible to take into account the fall of the price of cotton and so work out the weight. Naturally the fall has not been so great in weight as in value although obviously it has been very considerable. The Far Eastern situation has been one of the causes of the fall. The other is one, to which I referred last November, when we had a discussion of this kind—the industrial decline in the United States of America. It is almost impossible for us to exaggerate the influence that the United

States of America is bound to have on the commodity market. There you have 120,000,000 people, who normally enjoy a higher standard of life than any community in the world, who are dependent, for many of their requirements in raw materials, upon external trade. Therefore, the extent of their buying must have an important, almost a decisive, effect upon commodity prices generally. I will give one illustration of the decline of America as a purchaser of raw commodities. In 1937 they were buying from abroad commodities in raw materials at the average rate of 81,000,000 dollars a month, whereas the average rate for the first two months of this year was 49,000,000 dollars, a fall of 40 per cent. in United States consumption of raw materials purchased from the world outside her own boundaries.

Mr. Owen Evans: Has the right hon. Gentleman the figures of the manufactures from raw materials?

Mr. Stanley: I could give them but I did not extract them, because my argument was dealing more with the raw commodities, and I was using it as an illustration of the effect upon prices. Last November I ventured the opinion that the decline in America was due to causes more psychological and political in their character than causes of fundamental economics, and the junior Burgess for Oxford University (Sir Arthur Salter), who speaks with such authority in this House upon economic matters, agreed with me. I still hold that view. Unfortunately, there has in the interval been no change, but the decline which was then apparent has since continued. It is difficult for anyone, 3,000 miles away, to hazard an opinion, and it would be wrong for any of us here, certainly for me, to hazard an opinion as to the results or the effects of Governmental action.
It is true that industrial production in America, although it has fallen in the first quarter, has not been falling at the same rate throughout the quarter, and that the decline has been slower at the end than at the beginning. There has even been some slight recovery in the production of consumers' goods, and there has been a more than seasonal improvement in the value of construction contracts awarded. Hon. Members will have read in the Press that the President


has announced a programme for stimulating recovery, what is technically known as pump-priming, the result of which cannot be apparent for some months to come. Recently one has heard opinions from people who have returned from the United States and who are connected with business opinions more hopeful of recovery than they were a few months ago, but one thing is certain, and that is that American recovery when it comes will be the biggest contribution that can be made towards a recovery in commodity prices, and the recovery in commodity prices is the biggest contribution that can be made to industrial improvement in this country.
Having given these general figures, I should like to deal with some of the industries in which hon. Members opposite are particularly interested. The Secretary for Mines will deal with coal. I want to say a few words about cotton, wool, iron and steel. Cotton and wool were the first and the most acute sufferers from this fall in commodity prices.

Mr. George Griffiths: If the Secretary for Mines is to deal with coal, will it be about II o'clock?

Mr. Stanley: No. It will be in the middle of the Debate. My recollection is that in the last year or two the same practice was adopted, and my hon. and gallant Friend will speak in the course of the evening.
The history of the cotton industry last year was linked in the most marked degree with the fall in raw commodity prices. Up till the autumn the outlook for the cotton industry had been more promising than it had been for many years. Spinning activity had increased to 92 per cent. of capacity, unemployment had fallen to under 10 per cent., exports of yarn were the highest since 1929, and deliveries of raw cotton to mills was the highest since that year. In August there were first published the preliminary figures of the American cotton crop which gave signs then, which were afterwards more than justified, of its being a record crop in American history.
The result was a catastrophic fall in the price of the raw material. So great was the crop even above the estimate that the price of the raw material fell at once,

with the result that the favourable conditions in Lancashire have largely disappeared. This year exports have declined in yarns by 22 per cent. and in piece goods by 25 per cent., while unemployment has gone up from something under 10 per cent. to about 25 per cent. Lancashire and Yorkshire have been hit by two things. They have been hit by the fall as regards their own raw materials. [HON. MEMBERS: "How?"] Because once the price has started to fall people do not know where it is going to stop. If you could say that it would fall so much and no more, then the fall might stimulate rather than depress the price, but it is the feeling that one does not know whether it will not fall even more the next day, which leads to the results which we have seen.
Lancashire in particular has been hit very hard by this commodity fall and its effect upon their customers. The textile industry, particularly cotton, the cheaper grades of cotton, depends for its purchasers upon primary producers almost entirely. The big markets are in the East or in Africa among those who are engaged in the production of tropical and colonial products. No better illustration of that could be given than to quote Lancashire trade with West Africa. That trade went up by leaps and bounds in 1936–37 when the commodity prices in West Africa were rising, but the prices have fallen like a stone, owing to the cocoa dispute, and primarily the fall in the price of cocoa, and the consuming power of the native has been largely reduced.
These difficulties have given added point to the problem of reorganisation of the cotton industry. I do not know how far we shall be within the Ruling of the Chair in discussing a matter which may eventually result in legislation, but I may perhaps be able to say something on the Lancashire idea, or the idea of some people in Lancashire, as to reorganisation, and the negotiations which have been proceeding between themselves and me. It started last year when a deputation representative of Lancashire, including Members of Parliament, among whom was the hon. Member for Hulme (Sir Joseph Nail), came to ask the sanction of the Board of Trade to schemes for certain sections of the cotton industry, printing and dyeing. The


decision of the Government was that we could not endorse those schemes. It was not only that those schemes contained elements which we could not approve, but we also felt that sectional schemes with no central guidance and not fitting, therefore, into the general picture of the industry as a whole, might appear to help this or that section of the industry, but might end by an accumulation of costly increases which would be disastrous to the industry as a whole.
I asked the Joint Committee to put forward general proposals to deal with the industry as a whole, and that was done last December. The Government considered the proposals and laid down certain outstanding conditions which were to be settled. The first of them was the question of a definition of the trade and the types of manufacture which were to be covered by the scheme. That is a matter which concerns not only Lancashire and cotton but other counties and other textiles. It was obviously essential that those people and those trades which might be covered by the scheme should know and be able to express their views upon it. Negotiations have proceeded between the Joint Committee and other textile industries, but they completely failed to reach any agreement between them. The position now is that I have myself during the past few weeks seen representatives of the Joint Committee, representatives of that section of the Lancashire cotton industry which is organising opposition to the proposal of the Joint Committee, and the representatives of other textile industries who may be affected by the proposal.
I have undertaken in the light of those interviews to lay the views of the Joint Committee before my colleagues in the Cabinet and to give them an early decision. Without going into the details of the scheme all that I would say this afternoon is that no scheme of this character, whether it is adopted by the Government or whether it is passed by the House of Commons, can, in the long run, have any beneficial results unless it has the great weight of the industry behind it. The whole desire of a scheme of this kind is that of self-government by the industry, the desire of the industry to run itself in a particular way, and that desire is bound to break down unless it is a desire that is experienced by the large section of the industry.
It is idle to deny that just as there is a very strong feeling in Lancashire in favour of this proposal, so there is a very strong feeling against it. Without in any way judging the respective merits of the two points of view, I should like to say that in the difficult times through which Lancashire is passing I can think of nothing more disastrous to it than a violent quarrel in the industry, with two sides split and indulging in violent propaganda, at a time when we want everybody to co-operate. It does seem to me that on all scores it is a situation which can best be met by the desire on the part of all to give and take, and to try to find whether differences are as acute as they would appear to be, and whether it would not be possible for them to do w hat the whole of this House would like them to do, namely, to produce a remedy for Lancashire. If they could bring before the House a remedy which would prove efficient in the case of Lancashire—

Mr. Remer: May I ask what my right hon. Friend means by a large section of the industry? Does he mean 80 per cent.?

Mr. Stanley: I was only making a general remark. I cannot put it accurately at the moment although, clearly, that is the sort of question which must be answered at the proper time. With regard to the question of the woollen industry that seems to follow much the same sort of course as the cotton industry. I have referred to the question of Japan and her abstention from the Australian market. The wool which was then 16 pence and dropped by Christmas to 13 pence is now about 11 pence. I am glad to say that for the past two or three months it has shown greater signs of stability and one does hear in the trade that that is having some effect and there are encouraging reports from some parts of the industry.

Mr. Levy: Would the right hon. Gentleman be good enough to deal with the textile woollen industry?

Mr. Stanley: Perhaps my hon. Friend would make that point in the course of the Debate. The other industries are those of iron and steel. I remember my Question times all last Summer and during the early part of the Autumn were almost entirely occupied in answering Members who had some firm in their constituency which was unable to get the steel or the


iron which had been contracted for, in order to deliver it. Of course the early part of last year, and last year as a whole, was one of great industry, productivity and prosperity in the iron and steel industry. In 1937 production of pig iron rose to 8,493,100 tons and the production of steel ingots and castings rose to 12,984,000 tons. The figures are far in advance of anything that we have been able to show for the past 10 years. since that time, to a very large extent, output has kept up with demand. The delays have become less frequent and less long and even in the heavy section, which is still engaged to capacity and still has a large amount of orders on its books, the difficulty of delays has been largely done away with.
On the lighter side, there has been a considerable decline in the demands, and following upon that there has been a fall in the production. That is true of the output of pig iron and, unfortunately, during the spring a number of blast furnaces have been closed down. The hon. and gallant Member for Cleveland (Commander Bower) raised at Question Time a point of considerable interest. It was the action taken by the Iron and Steel Federation during the summer to try to meet what was then a situation of acute shortage, which, I venture to think, most people who studied the matter anticipated would continue for some time. The action they took was in two parts—first, to get through the Import Duties Advisory Committee, a reduction in the duties on foreign steel, both that imported under licence and the steel that comes in under different rates, not under licence.
Secondly, they wished to arrange for the purchase of scrap to meet the shortage which might be expected. As things have turned out the acute shortage passed more rapidly than was expected and to some extent the very large imports of iron and steel, which have taken place as a result of the policy, have been not an advantage, but an embarrassment, and account for some part of the unfavourable trade figures in the early part of this year, and also for the closing down of those blast furnaces to which I have already referred. I could not join in the comment of the hon. and gallant Member that this had been a mistaken and foolish action on the part of the federation. The danger at the time was very real. The danger was that a famine in steel would hold up

rearmament and other important work, and the action taken was prudent. As hon. Members, when they read the answer I gave to-day, will realise, these import duties have been restored to the previous level, and to. a large extent the scrap and the pig iron purchased by the federation have already come in and no further commitment has been undertaken.

Miss Wilkinson: Does not that prove the contention that this matter is too serious to be left to the producing interests alone, and that there should be a greater representation of consumers of steel?

Mr. Stanley: I do not think that would have altered the case. The complaint here is that the industry made these arrangements for getting more steel and has now been left with it on their hands. Obviously the interests of the consumers would have been to press for more and more imports and the industry would have been left with more and more on their hands.

Miss Wilkinson: Yes, but it would have started earlier.

Mr. Stanley: There is another subject with which I would like to deal and that is the question of the balance of payments. The adverse balance last year amounted to £52,000,000, as compared with £18,000,000 the year before— although that £52,000,000 was affected to some extent by special transactions in silver amounting to £11,000,000 which though shown quite properly as part of the adverse balance do not give a true picture of it. That adverse balance of £52,000,000 is not of itself very frightening. It is true, the excess of imports over exports of merchandise have risen from £346,000,000 in 1936 to £432,000,000 in 1937. But an analysis of the cause of that rise would show these things; first, it was not due to the decline in our exports. Our exports had increased in volume by 9½ per cent. It was not due to the increase of our imports, which was only 6 per cent. in volume. The increase was not unexpected in view of increased prosperity. The increase of £86,000,000 in the adverse balance was due mainly to the rise in the price of imports. If you were to revalue the imports and exports of 1937 on the 1936 price level the adverse balance would be reduced to £8,000,000. This rising price of raw commodities was the one thing which all others had for some years been hoping to


see. The fact that it was occurring did not give rise to any anxiety, because to a large extent the rising price of imports would be balanced by the rising receipts from exports. More disturbing than the figures of last year have been the figures for the first four months of this year. For the first three months, despite the beginning of the fall of commodity prices, the adverse balance increased. It was due partly to the increase of imports, but more to the falling off of exports. In April that tendency has been checked, and, compared with April last year, the adverse balance is less. One waits to see whether that tendency will continue. The striking point which hon. Members may not realise is that the whole increased adverse balance of trade in the first four months is covered by the increased adverse balance of trade of the United States. The increase in the adverse balance in all countries is £17,000,000. In the United States it is £22,000,000. With all British countries our balance has improved by £3,000,000 and with other foreign countries by nearly £2,000,000. It is true that this increase in the United States is due to certain fortuitous circumstances, such as a good American wheat crop and a bad Canadian one, and the increase in our imports of iron and steel to which I have already referred. But facts and figures of this kind need watching and must be taken into account in the negotiations now proceeding with the United States.

Mr. Holdsworth: One hears so many different accounts that it would be interesting to know how these figures stand in relation to manufactured goods. I hear stories which I am sure are incorrect.

Mr. Stanley: The rise in imports from America for the most part relate to raw materials or to the special classes of manufactures such as iron and steel. There is an increase of something like £3,000,000 in wheat, £3,000,000 in tobacco, £1,200,000 in iron and steel manufacture, and something like £2,000,000 in scrap iron and steel.
The whole question of the balance of trade leads naturally to another matter in which the Board of Trade is particularly interested and with which I desire to deal briefly. That is the question of trade agreements. By far the most important question arising in that connection is that of the negotiations which are now proceeding with the United States.

Those negotiations have been protracted. Our mission has been there since last February. Hon. Members will recollect however that, under the American procedure, in connection with trade negotiation, provision is made for public hearings sometimes very prolonged and these were not concluded until, I think, some time in April. Any discussion between two great commercial countries like these must raise complicated and difficult problems and negotiations must necessarily be long.
I have already told the Committee of the great importance which I attach to a successful outcome of these negotiations. What I mean by a successful outcome— and only such an outcome will bring the least benefit either to us or to America or to the world—is a genuine trade treaty which provides for a fair expansion of trade on the part of both countries. Nothing is to be gained by some kind of political treaty and the United States and ourselves approach this matter from a purely economic angle. Nor do I think anything is to be gained by either side making anything in the nature of a unilateral gesture. The treaty when it comes, must be a treaty which can stand on its own legs, which is fair to both countries and which leads to a fair expansion of trade between the two countries.
The other matter to which I desire to refer in this connection, is that of the negotiations with India. Hon. Members will recollect that our Ottawa Treaty with India was denounced in May, 1936, as a result of an adverse vote in the Indian Assembly. In the Assembly, the spokesmen of the Government had argued strongly that the Ottawa Treaty was fair to both sides and that India under it was getting benefits as great as those she gave. Those views, however, were overlooked. They were defeated in the Assembly and as a result, in consequence of a promise made when they denounced that Treaty, prolonged negotiations have been going on to try to find a basis for a new treaty. Recently at the invitation of the Government of India—because it was the method of negotiation which they preferred and thought most likely to succeed—a delegation from the Lancashire cotton industry went to India to consult with what are called the unofficial advisers, that is the several gentlemen representing various industrial and agricultural


interests in India who came over here with the official negotiators.
I am sorry to say that I heard only to-day that the negotiations between this delegation and the unofficial advisers have broken down, and that no basis of agreement could be found. Matters will now have to be resumed between the two Governments. I can only express my regret that it was not possible, by this method, to find some satisfactory settlement of the cotton question, because I cannot see how it is possible to conclude a trade agreement with India, unless we find a satisfactory settlement of the present cotton question and unless, in such agreement, we can get fair treatment for our cotton goods in India.
I would only add this with regard to the trade agreement policy. We have during the last year carried on the general policy of this Government, which has been to try by bilateral negotiations and by trade treaties, to reduce the barriers against our goods and so to expand, not only our own trade but the trade of the world as a whole. It is a method to which M. van Zeeland gave his blessing in his report. We believe in that method. We believe it has hitherto had a great deal of success and we desire to continue it. I am sure every one would wish to make it plain to countries abroad that, great as may be our desire to give them, as far as is compatible with fairness to our own manufacturers, access to this great consuming market, to a large extent the amount of that access must depend not only on us but on them. Unless they are willing to give us access to their market, as we give them access to ours, eventually ours must disappear.
We cannot any longer afford to make unilateral gestures in trade matters just as gestures of good will. International trade is vital to this country to-day, and under any agreement or any trade treaties with other countries, we must be assured of equal terms and fair play for our goods. It is a very difficult world in which to do business to-day. It is a very difficult world in which to negotiate. There are not many parts of the world now where you do not find some form of closed economy, whether it is subsidy, licence or control, the effect of which may be suddenly to upset any treaty and even to upset the course of ordinary

commercial relations. To a large extent Governments are capable of pushing their consuming power exactly as they desire. This is even more a matter of the spirit than of the letter of agreements between Governments, and if foreign Governments and our customers in general in the world are not prepared to keep their markets open to our goods, then inevitably, through no action of the Government, through no decision of policy, the market here must contract.
He would be a rash man who, under present conditions, as illustrated so vividly during the last 48 hours, attempted to make any long forecast as to the course of trade in this country or in the world. Two very interesting reports have just been published. One is the report of the Bank of International Settlements, setting out the factors which differentiate the recession in America to-day from that of 1929, and prophesying a much quicker and sharper recovery. The other is the report just issued by Mr. Butler, of the International Labour Office, who also holds the view that the recession in world trade which took place in the spring of this year, is likely to be of comparatively short duration. He goes on to point out one thing which must be present to all our minds in a passage of solemnity and in a way of beauty which one would hardly expect to find in an economic report. The terrible tension under which the world is living to-day makes us not wonder that trade is declining but makes us wonder how trade ever recovered. It makes us wonder not how trade is lost but how there is any trade at all. It is a tribute to the immense potentialities of industry to-day, and to the invincible optimism of mankind, to the almost unbelievable prosperity which might come to the world if only these terrible clouds could lift and if only we could say to ourselves: For ten, or 15, or 20 years ahead, for my lifetime and that of my children, peace is certain and I have not to worry about the shattering of my security. There are many things which the Government can do for industry, whether by helping industry to reorganise, or by tariffs or agreements with foreign countries, but nothing of that kind compares in importance with what the Government can do for the industry of this country, if it can secure the relaxation of international tension,


the removal of the fear of war, and the realisation that the springs of human activity and human prosperity would flow abundantly if only those terrors were removed.

5.12 p.m.

Mr. David Grenfell: I beg to move to reduce the Vote by £100.
I congratulate the right hon. Gentleman on his efforts to introduce a note of optimism into the presentation of the facts which he has given us this afternoon. I think he was over careful in his statement and in the anxiety which he expressed lest we should allow ourselves unwittingly to be influenced by the mysterious terrors to which he referred. The right hon. Gentleman had no need to draw upon his imagination or upon some secret source of information for the enlightenment of the Committee about these matters, and if I were to criticise the right hon. Gentleman's speech at all, I would say that he showed himself rather anxious not to open up too wide a field. Indeed he has been content with the repetition of figures more or less familiar to us, and has not launched into a thorough explanation of the causes of the present trade position. The question which he must put to himself, and which we must all ask ourselves to-day, is what is the reason for this very marked recession in trade or reduction in the volume of trade—I do not like the word "recession"—in 1938 as compared with 1937? The right hon. Gentleman is entitled to say that it is a difficult world in which to do business, but he did not relate the political difficulties of Europe and the world to our immediate difficulties in this country.
I feel sure there is much more to be said from his Department than he has said to-day regarding the causes of the reaction which we have witnessed since the end of last year. There must be some direct explanation of the present position which has not been offered us by the right hon. Gentleman. He has referred to conditions abroad and has attributed some of the trouble to the Chino-Japanese conflict. That is part of the explanation, but it is not all. Our trade with the East is only a small proportion of the immense figures which the right hon. Gentleman has quoted this afternoon. What he has said does not explain all. It does not explain the psychology of the position; it

does not explain why there is all this unrest and uncertainty, and a reluctance to buy and sell. In order to find the reasons for those things, we must come to closer quarters with the subject. The right hon. Gentleman said that in America they are trying out some remedies. I am very much attracted by President Roosevelt's efforts, and I hope that he does not succumb to the fatalism which seems to have overcome His Majesty's Government, and which seemed to overwhelm the right hon. Gentleman from the beginning of his speech to the end of it. I shall not attempt to examine the position in the various industries on which the right hon. Gentleman made observations, as there are other hon. Members who are far more familiar with those industries than I am; but I shall make some general statements, because I do not think it is incumbent upon hon. Members on this side of the Committee to make a survey from exactly the same standpoint or to cover the same ground as the right hon. Gentleman.
However, I agree with the right hon. Gentleman that recent figures of trade and industry are disturbing. There is without doubt a general fear of serious depression. There is not an hon. Member who has not heard of the apprehension and concern of his constituents, and who has not received communications from this or that industry or authority regarding the effects of the trade decline during recent months. A fact which has been amply established and which need not wait upon the publication of any figures is that unemployment is on the increase almost everywhere. That fact alone is a matter for serious consideration by hon. Members. An increasing number of our people are failing to obtain employment, and if it were a question simply of making provision for the continued existence of the people who are thrown out of work, that would be an important enough matter for the Committee.
We ought now to devote ourselves to considering immediate steps for arresting a further decline in employment and a considerable increase in the volume of unemployment. That is a big enough problem, a heavy enough responsibility, to be thrown upon hon. Members and the Government; but when one ventures a stage further, and considers what will be the position two, three, four or five


years ahead, and tries to imagine what the condition of this country is likely to be after the armaments programme has ended, one is appalled by the prospect. Unless the right hon. Gentleman and his colleagues in the Cabinet can give us something of real cheer, and not the whipped-up optimism of the latter part of his speech, unless he can give some substantial comfort to us, it will be very difficult to reassure hon. Members on this side and the public outside, who will take note of what we say.
The Minister has given us very little comfort this afternoon. Frankly, I am disappointed that there is nothing to dispel the gloom. As hon. Members who come from my part of the country will agree, there is perhaps more gloom, more pessimism and more despondency there than there has ever been; at the end of six years of depression in the South Wales area, people are to-day more disheartened than they have ever been during the whole of that time. Some words and some actions must come from somewhere to relieve the feelings of those people. Up to now there has been no evidence of any great concern on the part of the Government. During recent weeks we have heard speeches in the House about prosperity, but the word "prosperity" does not fit even the year 1937. The right hon. Gentleman used that word, and spoke about great prosperity and great production; but really the year 1937 was not one of comparative prosperity, for in that year a very large number of our people were not able to put in a day's work throughout the whole year. The word "prosperity" is not the right one to be used in that connection, and now that unemployment is increasing, it is rank blasphemy to refer to the condition of this country as being anywhere near prosperity. There is terrible distress, and despondency is increasing from day to day, because nothing is said either here or anywhere else, to give people in the Special Areas, the unemployed, any ray of hope or any courage to proceed on their hard and difficult way.
I regret to say that this afternoon I was not comforted by the Minister, and I regret that I have to bring to the notice of the Committee disturbing reports, which the Minister has not brought forward, showing that even rearmament has

not brought work for all. There was an impression abroad last year that additional expenditure on armaments would bring plenty of work; indeed, I often heard it said in the House that there would not be sufficient workers to do the work which the rearmament programme would entail; I heard it said that there was already a shortage of labour. That has never been true. If there is a shortage of labour at a time when 1,750,000 people are unemployed, that is final evidence of a lack of organising ability on the part of those concerned with the running of industry from day to day. It is not true that, even with the expenditure of an additional £250,000,000 on armaments, work has been found for all the people in this country.

Sir Henry Fildes: Does the hon. Gentleman deny that there is a shortage of skilled labourers in some trades?

Mr. Grenfell: I have not met with such a shortage. I am sure that if there is one, it is due to lack of organisation, and not to lack of labour. This rearmament programme, which has been superimposed on our industrial system, has served as a camouflage to conceal the real condition of industry. The effects of the rearmament programme are not discernible to us. I confess that I do not know what industry specially benefited by rearmament, and I am not quite certain what industry has been stimulated by that rearmament programme. It has served as a kind of camouflage of the industrial situation, and has confused the judgment of many people who wish to understand what is taking place. The right hon. Gentleman referred to pump-priming in connection with America. Those who, like myself, were brought up in villages, where we used pumps, often resorted to pump-priming. It is a very good thing and it is fully justified when the lifting bucket fits too loosely in the pump barrel, but when it fits the barrel all right, one does not need pump-priming. The pump-priming to which the right hon. Gentleman referred is an expedient which is used when there is something wrong with the economic system. It is an attempt to put forward as a good working pump some expedient which prevents some leakage, but does not increase the capacity of the well, and does not add to our resources and supplies.
It is true that certain industries in this country have been stimulated by the appearance of this programme, but, frankly, if one balances the gains and the losses in 1938, compared with 1936, although we spent £250,000,000 of additional money collected from the taxpayers, the effect is negligible. It appears to have gone through the pump somehow, but it has not led to a larger volume of work and wages and more comfort and contentedness for our people. The figures for demand are declining. I will not go over all the figures, but I think I shall be able to show that there has been a falling-off in demand which can be attributed only to fear and panic caused by the rearmament programme itself. One cannot call attention to the risks of war and the need of preparation without driving some people off their ordinary course of life. I am certain that the falling-off in demand can be explained partly by the enormous expenditure on armaments, and the psychological influences of that expenditure. The right hon. Gentleman spoke about the psychological causes of the difficulties in America, but if he will look closer at home, he will perhaps find some psychological causes for certain of the things which trouble us here.
I will quote some figures to which the right hon. Gentleman did not call attention directly. The number of people unemployed in this country is 366,417 more than it was 12 months ago. The increase in unemployment goes on from day to day, and there is no lessening in the volume. I find it very difficult to explain how the sum of £250,000,000 can be spent without finding more work for people. Figures have been given again and again in the House to show that directly or indirectly the expenditure of £1,000,000 provides work for 4,000 people. If that figure be right, the expenditure of an additional £250,000,000 on armaments ought to have found work for 1,000,000 people. Yet we find that there are 130,000 fewer people working in April, 1938, than in April, 1937. I do not know where this expenditure goes, but that is a subject for investigation.
I wish now to refer to the widespread unemployment by reference to a few short notes which I have taken from the reports of the Ministry of Labour. I find that, as regards employment in April,

there was in coal-mining a further decline; iron mining, further decline; pig iron, iron and steel and tinplate, further decline; textile engineering, further decline; shipbuilding, ship repairing, slight decline; textile industries, cotton, further decline, very slight, much worse than a year ago; woollen textiles, very slack; hosiery, slack; textile bleaching, bad; leather trades, decline, much worse than in December, 1937; pottery and glass, slight decline, slack on the whole; fishing, very bad; dock labourers and seamen, slack generally, and worse than in the corresponding period of last year; boots and shoes, increased unemployed. I relate those facts to the Committee because I want hon. Members to be seized of the very widespread decline in trade, for which no explanation has been offered. Attention must be given to this decline some day. If the Government cannot find an explanation, then their responsibility is indeed a formidable one. I would not like to occupy the right hon. Gentleman's position for another 12 months unless I made a closer approach to this problem than he has made.
The industries of coal, iron and steel, tinplate, textiles and building are those that need most attention at the present time. With regard to coal, there was throughout 1937 a fresh demand which was maintained until almost the end of the year. The production for November and December, 1937, exceeded 21,000,000 tons per month, but for January and the successive months of this year the production has declined. More than 1,000,000 tons a month has been lost in production in 1938. There has been a reduction in the inland and export sales. Pits have closed down temporarily or are working on short time. The number of men unemployed has risen every week. The percentage of unemployed miners has gone up from 11.8 to 14·4. In some districts the percentage is very much higher. Wales as a whole has as unemployed body now standing at 25·9 per cent. of the industrial population. The county of Carmarthen has 31·7 of the industrial population out of work, an increase of 11.4 in the last 12 months; Glamorganshire, 28.2, an increase of 4.2; Monmouthshire, 25.1, an increase of 0.8 per cent.
Coming to the coal mining areas, a place called Tunble has an unemployed population of 32.6 per cent., which is


22 per cent. more than 12 months ago; Mountain Ash 52.7, an increase of 29; Ogmore Valley 106, an increase of 85. That is the condition of the industry in South Wales which is the most important of all the coalfields, from which 71 per cent. of the British exports are sent and from which comes the best steam and anthracite coal in the country. That coalfield is sinking deeper and deeper into decline and poverty every day. It is true that in 1937 there were increased shipments to France, Germany, South America, Italy and Denmark, but there were markets in which we lost our orders. One of the greatest losses we incurred was the loss of the markets to Canada. That is very difficult to explain and there must be something wrong when we have this Government—the National Government, the Empire Government, the Government of all the talents. Why did they let slip that large market? Is it beyond their power to do anything to retain a market so closely connected with the producers on this side?
I want to say a word about the iron and steel trade and the tinplate trade. These industries produced a record output in 1937. They are now suffering with the others. Iron and steel production is down 6 per cent. in April as compared with April, 1937. During 1937 the output reached a figure of nearly 13,000,000 tons, a record figure. South Wales production declined a little more than English production for special reasons. Wales supplies more than 90 per cent. of the tin-plate production of this country. It is our oldest industry. We have been doing it in South Wales since 1670. We have done it well. There is no fault to find with the manufacture, or with the skill of our people, or with the processes of the industry. We have maintained first-class quality of production from the beginning and have been able to hold this enormous proportion of world trade in tin-plate up to this day. Out of a total of world production of 4,000,000 tons of tin-plate, we still produce in South Wales 1,000,000 tons, which is a large proportion after 40 or 45 years of world competition. It is a commodity that is growing in use and is continually being used for new purposes. It has been found suitable for a considerable variety of purposes and we are much concerned about the position. We are tied up with this industry in

a very special way. Our coal trade and our iron and steel trade depend on it. We have lost tremendously because since 1937 the orders for iron and steel have declined to less than one-half and we are now producing less than 40 per cent. of our capacity as compared with at one time between 75 and 80 per cent.
We are very much concerned because there is apparently graver trouble ahead, for with the provision of an excess productive power of more than 50 per cent. there is to be additional production. We are to see coming into production in the next few months a new method of manufacture, copied from America and installed at large capital expenditure. We are expecting to have a continuous process of strip metal working in a few months time in South Wales which will produce, it is anticipated, strip and tinplate at a very much lower price than the present method employed. By this process 300,000 tons additional production will come into a market already 50 per cent. over-full. That is a tremendous danger to the trade. I and the hon. Member for Llanelly (Mr. J. Griffiths) represent more tinplaters than any other Members in the House. There is great anxiety in this industry and among the men in it. They are specially trained men, and there are no better workers in the world or in any industry. They have lived comfortably and with some security, and now this threat comes upon them. It is a threat not only to the individual workman but to the whole tinplate industry in West Wales. There is one township in my division where more than 60 per cent. of the people are employed in the industry. There are certain tinplate works, each of which is owned by a separate company. There are places in my constituency and in the neighbouring constituency where all the works are owned by one single manufacturing concern and where the word of one man can stop a whole community working. That is an immense power to be given to one man.
I want the President of the Board of Trade to pay attention to this terrible calamity. He talks about the catastrophe that might come. There is already one locally. Whatever happens to this country, you cannot do more damage to these communities than by closing down places of employment. I want the right hon. Gentleman to pay attention to the tinplate trade in South Wales. I do not


wish to name firms or attribute motives, but here is a problem which affects not only the people in the tinplate trade but those in the coal trade and, very vitally, those in the steel trade itself. I want to say something about iron ore and iron and steel production in this country. There is a great fear that we shall cease to make sufficient pig iron in this country for our own use. We are closing down our blast furnaces and throwing people out of employment in that industry. That has a far-reaching effect. It is not a matter of concern only to the men or only to the people who work the blast furnaces. This trade is interconnected with others. In the making of one ton of pig iron there are consumed three tons of iron ore, one and a-half tons of coal, and eight cwt. of limestone. All these minerals have to be got and transported to a point where they are brought together in the blast furnaces and a considerable volume of employment is given in the process. Last year we produced about 1,000,000 tons of pig iron. The average price of pig iron is about £5 a ton, and that £5 is spread over to pay the wages of men in the coal industry, in the limestone industry and in the blast furnaces themselves. A tremendous network of expenditure and purchasing power is involved in the production of pig iron which does not count very much in the figures of British steel production.
This closing down of blast furnaces and the shutting down of iron ore mines has a very serious effect upon employment, and especially upon employment in the localities where that production is carried on. We have in South Wales iron ore deposits never wholly developed or exploited. They can produce at the present time a maximum possible of 5,000 tons a week, or 250,000 tons a year. They can produce at that rate over a considerable time. By going deeper a considerable body of iron ore can be got close to the point where steel and tinplate are produced and where coal is mined. All the elements are there together for the most complete and economic production of the finished steel product. I would like to ask the President whether he will not consult his Cabinet colleagues and the Prime Minister, to see whether he could not now as a measure of emergency—a short-time policy if you like—go on producing pig-iron. Why not produce 1,000,000 tons of pig-iron and let it be

stored? It is not a perishable commodity and it will not be any less valuable 12 months after it is produced than on the day it passes out of the furnaces. The Government could, by suspending the closing down of these furnaces, keep the iron ore mines in production. I want to give figures which perhaps everybody can grasp without close examination. One hundred thousand tons of pig-iron needs for its completion about five times the weight of iron ore, coal and limestone. It will give employment for a full year to 3,000 men in every one of those branches of production.
I beg the President of the Board of Trade when he looks at South Wales and sees one industry dying to-day and another to-morrow, and the whole of them hanging on to each other in an effort to survive and dragging each other down, to do something immediately by the simple instruction which he can give to these people to go on producing iron ore. I do not mind if you produce this month more than can be consumed next month. They could go on producing for stock, they could guarantee a price—even the present price would be good enough— and that would set people to work. Many of them are men who have been out of employment for a long time, and after having had a short spell of employment again now find themselves thrown out once more, and with no prospects ahead of them. I shall pass over the question of textiles, because that is a highly technical industry which should not be dealt with except by anybody who is well conversant with it, but the figures published by the Minister of Labour should be regarded as a solemn warning by everybody, not only by the people of Lancashire, of the danger that awaits our industrial enterprise in this country.
I will come next to the question of motor cars, which has been discussed in the House previously and was raised at Question Time to-day. The present position is due to a special form of artificial competition in our home markets. Artificially low prices are responsible for the increase in the number of German motor cars imported into this country. I should hesitate to take up a case of this kind were I not convinced that this is no case of ordinary competition, that it is not even a case of ordinary dumping, but is a deliberate attempt to do something which, while benefiting the Germans,


must dislocate our motor manufacturing industry and in that way create infinite harm. It may even have serious political complications, and I wish the Government to say something about the position.
The following information has been given to me, and I think it can be authenticated and is accurate. The number of German cars imported in 1933 was not more than 28. By 1936 the number had increased to 515, and in the first three months of the present year no fewer than. 2,974 cars were imported from Germany. They are light cars of a special type, and so they come into competition with only one type of car, the British manufactured car. They do not come into competition with Canadian and American cars, all those cars being over 17 horse power, but they do come into competition with the smaller cars produced in this country, and that competition is artificially stimulated by generous and large subsidies by the German producers themselves, under German Government auspices. That competition must, in the long run, be fatal. I do not say that the influx of German cars will drive out all our own cars, but it will make such inroads into our production of cars as to cause considerable difficulties indeed, and something ought to be said about the position by the President of the Board of Trade. I thought he would have said something in the speech he has already made.
When the costs of a typical light English car are analysed, it is found that the factory costs run to between £100 and £110, the whole of which sum is spent at home with the exception of £4, which represents the cost of the imported iron ore used in the manufacture of the metal parts, the rubber for the tyres, the cotton, and so on. Of that £100 spent on British manufactured materials, £80 to £90 is spent on labour and it represents the labour of one workman working for 20 weeks. Expressed in terms of home labour, one motor car represents work for one man for 20 weeks. The 3,000 German cars which have already reached these shores in the first three months of this year and are now parked at Southampton or elsewhere represent the work of no fewer than 4,600 German workmen who have been working, or 4,600

British workmen who have been unemployed. It is a serious position.
If it were not artificial competition I do not think anyone on this side of the Committee would be making a speech on these lines, but it is an abnormal situation. As I have said it is not even ordinary dumping, but something ever worse than that. I will give some figures to show the prices at which these cars are sold. The Opel cars from Germany, which are of 11.1 horse power, are sold at £135 to the buyer here. The Morris 12 horse power car costs £205, the Standard 12 horse power car £205, the Vauxhall 12, £215, the Austin 12, £220 and the Wolseley 12 £245. When the costs of manufacture are examined it is seen that they are not very different as between the English cars and the German cars. The cost of production of English cars retailed at these prices is £9 14s. per cwt. and the cost of production of the German car is £9 2s. 8d. per cwt. There is not much difference there, and it may be explained by lower wages or by other facilities.
The German cars have to carry the cost of freight charges and insurance before they reach the retail purchaser in this country, and it cannot be said that the cheaper price at which they are sold is due to the cheaper cost of production. I submit that it is due to the subsidy derived from the producers. The German car is sold in Germany at 2,100 Reich-marks, equivalent to about £175, but it is sold here after it has borne the burden of freight and insurance and the 33⅓ per cent. ad valorem duty at £135. These are facts which the Committee should know, and the questions which were put to the President of the Board of Trade and to the Chancellor of the Exchequer this afternoon deserve the fullest consideration, and a reply which will satisfy Members of this House to a greater extent than they have been satisfied before.
Then there is the question of whether the Customs duty should be charged upon the higher value of the car. I do not see why a car should be sold to purchasers in Germany for £175 and then represented to British Customs officers as being worth only £70 and be subject to duty only upon that fictitious value. If the car sells in Germany for £170, that is the value of the car, and it is the value on which it should be taxed. In any case


it is open to very grave doubt whether anyone can justify charging the ad valorem duty on half the cost of the production of the car, and if that is allowed then the British Government are a party to subsidising these cars. If an American car is sent into this country and its value is said to be £200 they pay as duty £66 13s. 4d., but if the Germans send a car which is worth £200 and say it is worth only £100, they get away with a payment of only £33 6s. 8d. as duty. We are assisting in the subsidy of the car by that manoeuvre. The money for the subsidy in Germany is raised by a charge of 3 per cent. on the whole of the turnover of the producing interests in Germany. They form themselves into the Automobilindastrie Verband, and they collect the money which pays the subsidy to the exporter for each car sold in this country.

Mr. Levy: There is also the question of the manipulation of the currency.

Mr. Grenfell: That does not bear directly on this question, but it is a part of the general question affecting trade between the two countries, and it should not be left out of account by anybody who tries to find a way through the maze of these industrial and commercial conditions. This, however, is not one of the ordinary trade difficulties. This is a deliberate change in the methods of trading and the House must take note of it. It is not straight competition, and because of that I have felt quite justified in making these representations while holding the general view that the country will benefit by a return to the ways of Free Trade as soon as ever the world will come to an agreement with us.
The right hon. Gentleman left until the last moments of his speech any reference to the van Zeeland Report. That is a very useful report indeed, full of suggestions as to the direction in which all countries must move, and they must be examined under the direction of some leading authority. The world is suffering from a desire to arrive at self-sufficiency. Autarchy is an entirely mistaken idea of world prosperity. I am sure that it is the way back and not the way forward, and I hope that this Government will play its part in the promotion of international agreements—not exclusional agreements but general agreements—for the easing of trade facilities

and for securing greater access to the raw materials of industry. I am sure that there is no way out of the psychological embarrassments to which the Minister referred save by a recasting of the whole economic system of trade and international commerce. All that has to be done, but I hope that the President of the Board of Trade, while awaiting the arrival of happier days for discussion and negotiation with other nations, will pay immediate attention to the conditions in our own country to which I have drawn attention. I trust that while working for a long-term policy, in which he may have to be joined by the representatives of other nations, he will immediately embark upon a short term policy to find employment and purchasing power for the people of this country.

5.57 p.m.

Sir H. Fildes: My first duty must be to congratulate the President of the Board of Trade upon his restoration to health. He is filling a position in which he does need our sympathy, because upon the efficiency with which he discharges the duties of that position depends, in my view, the livelihood of the vast majority of the working class in this country. I was very much interested to hear the hon. Member for Gower (Mr. Grenfell) giving utterance to some very sound sentiments on Protection. The motor cars to which he referred are, as is well known, the product of an American company which is manufacturing them in Germany, and he has raised some very pertinent points to which the Committee have a right to expect an answer. If they are selling a car in Germany for £175 and when it arrives at the Customs in Southampton its value has suddenly dropped to £70 or £100, then that transformation calls for some explanation. However, the subject upon which I wish to address the Committee is the general situation in the cotton trade. In the last 20 years our cotton export trade has seriously shrunk in volume.
The first point I wish to establish and to get into the minds of Members of the Committee is that the customers of the cotton trade are the poorest people in the world. I would ask hon. Members to consider the steps that have been taken in the last 20 years to meet the very serious competition from India, China and other producing countries which, years


ago, were our best customers. What is the position to-day? The cotton spinner's wage is something like 11 per cent. more than it was in 1913 and the wage of the weaver something like 80 per cent. more than it was in 1913.

Mr. Tomlinson: Sometimes.

Sir H. Fildes: If the hon. Member will look into the matter he will find that the standard rate agreed upon between trade unions and employers shows an increase of about 80 per cent.

Mr. Silverman: Is the hon. Gentleman referring to the actual scale of payments or to the amount actually earned by the weavers? The actual earnings of the weavers are lower to-day and are hardly more than 30s. per week. Twenty years ago that wage was worth only about 10s.

Sir H. Fildes: The scale of wages has been raised, but it has not been to the eventual benefit of the operative in the cotton industry. I have never been proud that the Lancashire man and woman turned out at six in the morning and worked until six at night for a totally inadequate wage, to make loincloths for natives in various parts of the world. I do not deprecate any movement that has taken place to enable cotton operatives to receive a living wage out of the industry. The operative is far better off, however, with a smaller industry capable of paying a proper wage, than with this desperate competition with the Japanese and the Indians, who are prepared to work at a very low wage indeed.
The Government could have done more. I do not know whether hon. Members remember the arrangement which was entered into and which was very unjust to this country, with regard to India and Burma, and which has given a greater advantage to the Indian producer over the producer of cotton goods in this country. Here I would ask hon. Members to follow my previous point, to remember that our customers are the poorest people in the world, and to remember also what we have done in trying to meet competition. It is not only that there has been an increase in the scale of wages for bleachers, dyers, printers and finishers, but that since 1909, when we had the trade we had not unemployment insur-

ance, which is all very admirable. All kinds of burdens have been placed upon the competitive power of the industry in the open markets of the world. Rates are at least double what they were 20 years ago.
We are now paying for baths, wash-houses, public parks and social amenities of all kinds—[Interruption]—but you cannot do all these things without influencing your competitive power. I am trying to face the position. I am prepared to let go an industry which cannot provide those things and a reasonable subsistence wage. We have to find money out of the industry for Little-wood's pools. All such things come out of our competitive power. I am quite prepared to say that the man and woman who have worked hard all the week have a right to spend their money in the way they like, and it is no part of my argument to take those things away.

Mr. Sexton: Littlewood's is a loan club.

Sir H. Fildes: I will go back to the old days. Take Oldham. From 1903 to 1913, the average dividend earned by the cotton mills of Oldham was 2½ per cent., over the period of 10 years. I would ask hon. Members to look at recent legislation. We passed a Spindles Act. One of the first results of it was a levy on the industry which was estimated to yield £500,000 a year, or 2½ per cent. on £20,000,000 of capital engaged in the cotton trade. The levy is on the back of the competing power of our industry in the open markets of the world. [An HON. MEMBER: "You are not in a bad way."] A considerable part of Lancashire is not in a bad way. Very large fortunes have been made within the last five or 10 years in the cotton trade, by people who have taken the lead. They have gone away from the ordinary bread-and butter production of the industry.
One of the best things the Minister could do would be to subsidise and encourage young men to join the industry and to study and go through a course of research. Only in so far as the cotton industry can lead the world will it survive, while the Japanese are prepared to work for a handful of rice and a glassful of beer. In India also, people work for very low rates of wages. In 1938 it is unfair and it would be disgraceful to call


upon Lancashire operatives to work at anything like the same rate of wages, in order to compete with the people of India. What is the spectacle? Referring to the competition in India, the President of the Board of Trade spoke of efforts to induce the Indian Government to raise the price of cotton goods to such a basis as would enable it to pay our 80 per cent. or 100 per cent. increase over 1913 and to maintain a standard of life much higher than those poor people in India enjoy. I am rather ashamed to think that we have sent people out there to plead that those poor people should be called upon to pay additional and unnecessary prices for their articles of clothing. What for? In order that a few of our people at home might get a measure of employment with a higher standard of living than is given to the poor people in India.
From practical knowledge I can say that the cotton industry is generally efficient. You can talk about the meat industry in America, where it is said that they use every portion of the carcase and can the squeak; in the cotton industry every pound, nay, every ounce, of cotton is accounted for, even though it is only in the shape of the dust extracted in the processes of manufacture. Suppose that some person discovered a new method of industry in the cotton trade; do hon. Members realise that he could not commence in business in Lancashire until he had paid levy to the Spindles Board, and that if the Spindles Board had been in existence for five years he would have to pay five years back-levy before he could commence his new business to bring salvation to the Lancashire cotton industry?
In the Spindles Act His Majesty's Government have made one of the greatest mistakes that have ever been made. We had a Coal Bill this Session. Let hon. Members consider the price of coal to the cotton spinner and follow it through the industry. Remember the increase of the cost of coal to the spinner, the weaver, the finisher, the bleacher or the printer, as the case may be. Taking the piece at 100 yards long, the increased cost of coal is responsible for a charge of over 1s. for every piece that is produced in Lancashire to-day. Bear that in mind that the poorest people in the world cannot afford to pay the charges that we keep multiplying and increasing the burden of our competitive industry.
A reference was made by the President of the Board of Trade to what had brought about the present very depressed condition of the cotton industry. I am sorry that we have not time to amplify this aspect of the question, but I will tell hon. Members the position. Immediately the Spindles Act was passed, a price-fixing board was arranged and the price of yarn was immediately fixed to come into operation upon a certain day. A week previous to that day all the salesmen went to the manufacturers and said: "If you place an order for yarn to-day you can have it at 1d. a 1b. less than we shall be able to charge next week." The whole of the industry covered itself with purchases. The manufacturers went to their customers, American cotton dropped 3d. a 1b., and the whole industry was left with dear yarn and cloth. It is on the shelves of the manufacturers and merchants to-day. Our competitors were not dragooned all to act at once. It was a case of when father says "turn" we all turn. That is all right when it is a turn in the right direction, but it was a turn in the wrong direction, and we have all fallen out of the bed.
That is what has happened in the cotton trade of to-day. There is a very serious situation in regard to all commodities. We were the first people to taste the bitterness of rationalisation. The Bradford Dyers, an association of all the prosperous piece dyeing firms in the cotton or woollen industry, the Calico Printers' Association, and others, are gathered together, and they have a standard of price that has gradually driven competitors out of business. Hon. Members may be surprised to hear that, in the different processes dealing with piece goods and cotton cloth articles after they have left the loom, a situation has developed in which practically all the water rights in Lancashire and Cheshire are in the hands of three or four groups of persons, who when they close a mill make it a condition that the water shall not be used for any of these processes, so that it is gradually brought into the hands of a very few people who are in control of the major processes through which the cotton cloth passes before it reaches the public.
All this proves that, as an industry, we can give up hope of ever supplying in any large quantity the natives of Japan,


China or India. It would be necessary to reduce the wages of the workpeople to such a point—and I am not prepared to support that—that the game would not be worth while. But, if we concentrate on having an efficient industry, full of new ideas, going away from the past and reaching out, so that it may at one and the same time be capable of paying reasonable wages and giving the world a commodity which is a source of pride both to the producer and to the consumer. I hope the President of the Board of Trade will carefully analyse the proposals that have been submitted to him in a very nebulous form. I repeat that we cannot look for a restoration of those markets which were obtained and maintained by sweating the labour of the cotton operatives in Lancashire; and, now that the people of India have reached a point at which they are not only supplying their own needs, but are competitors in our other markets in the world, it is unreasonable and misleading if we try to contend for one minute that any of these proposals contain in themselves the germ of a resurrection of our cotton trade in India, China and Japan.

6.20 p.m.

Mr. O. Evans: I dare not enter into a discussion of the curious intricacies of the cotton trade, following an expert in that trade, but I am sure the Committee were interested to hear the censure which my hon. Friend the Member for Dumfries (Sir H. Fildes) passed upon the Government for their action regarding the cotton trade. He, at any rate, has declared to the Committee what he believes to be the very worst thing that the Government have done. Many of us have discovered worse things, but we have not yet decided which is the very worst. However, my hon. Friend has said that the Government did the very worst thing in passing the Spindles Bill. I listened with very great interest to the comprehensive statement of the President of the Board of Trade, and I am very grateful to him, as I am sure the Committee are. One may, I think, regard his speech as one designed to try to make us keep our spirits up, but at the same time he was clearly quite unable to make any rash promises as to the future. Although he was able to produce figures which did not look so bad, comparing sortie period last year with the year before, he was

not prepared to give the Committee a clear picture of the actual condition of things as it exists to-day. After all, the most important thing is not what happened as between 1937 and 1936, or even between the first quarter of 1938 and the first quarter of 1937, but what is happening to-day throughout the country in the month of May, and what the manufacturers of this country consider to be the outlook for the future having regard to the state of their business and of their order books to-day.
I do not propose to follow the hon. Member for Gower (Mr. D. Grenfell), who drew a sombre and melancholy picture of industry to-day, and especially those industries with which he and the hon. Member for Llanelly (Mr. J. Griffiths) are familiar. I cannot say that that picture was in any way exaggerated or that it was in any sense too dark and gloomy a picture. The hon. Member, with his usual care and thoroughness of investigation, produced some very clear and definite pictures showing that, in certain trades at any rate, there had become established what he called unwillingly a recession, or reduction, or contraction in trade. He drew attention specially to the tinplate trade, which is of vital importance to certain areas in South Wales. Representing, as I do, an adjoining constituency to his, in which the centre of the tinplate industry is located, I would point out that the prosperity of agriculture in the surrounding areas is largely dependent upon the prosperity of industry in the industrial regions of South Wales, and, therefore, to all the agriculturists and farm workers in my constituency and in neighbouring constituencies it is of the utmost importance that the industrial prosperity of South Wales should be restored at the earliest possible moment.
There can be no doubt that, as we know the position, not from examination of past figures, but from the latest information that we have, the trend of trade is in a languishing direction. I do not want to weary the Committee with detailed figures, but I could produce plenty of evidence in relation to other trades which have not been referred to to-day. I want to draw the attention of the Committee to certain statements that are made in current trade publications, and to current estimates made by investigators into the condition of affairs at this


moment. Take the metal trade, with which I happen personally to be more familiar than I am with textiles or coal. Take the most recent reports regarding, not only the metal producing, but also the metal consuming trades in the country. With regard to copper, for instance, it is stated in the technical Press that flat conditions prevail. In the case of lead, which comes into consumption in this country in various directions, there is stated to be a continued downward drift, encouraged by lack of consumer demand.
In iron and steel, to which reference has been made by the right hon. Gentleman, there is to-day a progressive decline. I saw it stated in the Press that the hon. Member for East Middlesbrough (Mr. A. Edwards), only a few days ago, was urging the Minister for the Co-ordination of Defence to establish a Government reserve of pig iron, because of the progressive distress owing to contraction of production in the area which he represents. He pointed out that, unless something was done, at least half-a-dozen more blast furnaces would be blown out, in addition to those which have been blown out in the past. The President of the Board of Trade referred to-day to the conditions of the trade in iron and steel scrap in this country. He referred to the steps which were taken by the Advisory Committee last summer. But what is the position to-day? This very day the trade is described as having relapsed into a state of torpor, with the consuming works embarrassed by heavy stocks. This is a bad sign for the future. It is further stated in the trade Press that the prices of this material would probably tumble if it were not for the controlled price agreement by which the existing price is maintained. Certain qualities of scrap, which are not controlled as regards price, have been marked down. I need not weary the House with other estimates of the present state of affairs in this country, from the "Economist," from the London and Cambridge Economic Service, and from one's own personal experience.
Let me take the case of the non-ferrous metal trades, with which I am familiar. One can theorise about the future, and about the reasons for this recession. Various opinions can be given, which never agree. But there are people who know the facts with regard to the posi-

tion. The latest report from Birmingham, which has been, not unduly, but remarkably prosperous during the last two or three years, says that sales and deliveries have fallen, that new orders are not coming in as fast as they would like. Other centres—Sheffield, Glasgow, and Manchester—tell the same story, and the Minister himself referred to-day to the lack of steel. I assume he was referring more particularly to the alloy steels, the special steels, where a recession has been shown. There is a very serious setback, for example, in one commodity which has shown a great vitality in this country: that, is, the manufacture of stainless steel. As regards stainless steel from Sheffield and other areas, this country was well abreast of any other country, both as to quality and quantity. It only remains to say what is the effect of the rearmament programme upon these peace uses of this material. I am afraid it is only too true that where in the steel industry an emergency demand has occurred for steel for armaments, that is largely at the expense of the development of steel for peace uses.
Looking at the position now, in the month of May, it is no use trying to avoid the conclusion that there is a definite downward trend in a marked degree. Call it a retraction or a recession. A recession may lead to a depression, which may last for some time. I know the Minister quoted the opinions of prophets to the effect that this depression, if it should happen, would be a short one compared with the last. I have heard prophets before, and I prefer to wait and see. We have been warned from time to time not to talk about slumps. I am the last who would wish to talk about possible slumps, as any man who is engaged in business would be. But the hon. and learned Member for Greenock (Mr. Gibson) asked the Prime Minister the other day what were the Government's plans for meeting a slump. The answer the Prime Minister gave was that he had nothing to add to an answer of 14th December—that the situation has not changed sufficiently since then to warrant doing anything. The question that was asked on 14th December was as to what was
 the Government's policy to meet the serious unemployment problem that threatens


the country in view of the oncoming slump,
and the Prime Minister's answer was:
I do not accept the implication in the question, and consider that talk of an on coming slump is not only exaggerated but dangerous."—[OFFICIAL REPORT, 14th December, 1937; col. 988, Vol. 330.]
He said the country was in a far better position to meet a temporary decline in trade than at any time since the War. Somebody may understand what is the difference between a temporary decline in trade and a slump; but the expression looks to me to be a mere euphemism, designed to throw a cloak over the very ugly word "slump." I am bound to say that the situation, as I see it, has changed a great deal since 14th December, 1937, and the change has been so obvious in many respects and in many directions—it has even been indicated to-day by the Minister in his speech—that I fail to understand how the Government can deliberately shut their eyes to it. It needs no microscope to see it. It looks as if the Government are watching affairs to-day—industrial, commercial and foreign affairs—through the wrong end of the telescope, in order to keep realities as far as possible from their ken.
The Minister made to-day an observation which has often been made with regard to the effect of falling prices on prosperity and on the markets. It seems to be a sort of theory that a fall in prices in itself must mean a depression, and that a rise in prices must mean prosperity. With great respect, I say that the Minister cannot draw that conclusion at all. Every practical business man knows that when you have a falling market people have a tendency to withhold their purchases, because they want to find out where the fall starts; but that does not mean that low prices are going to result in a depression. The uncertainty of prices causes depression. What the world needs to-day is stability of prices. Take the position in the copper industry. Nothing was worse, from the point of view of the fabricator of copper and copper alloys, than to have the price of copper soaring up and up, without any means for the fabricator to know when it was going to stop. All these fabricators are looking for a stable level of prices. If there is one failure in connection with the economic system of the world to-day, it

is the failure of those engaged to establish a sound level of commodity prices. That is the great weakness of our present system. I am not going to blame the Government for not doing that, but I would like to remind the House of one or two features of the great change since December last year.
The Minister drew attention to the great depression in the United States of America, which he attributed, to some extent, to the breaking out of the Sino-Japanese war. But have we not got a cause much nearer home? May I draw attention to the occurrences of the last week-end, and to two passages in the "Times" to-day? In the leading article, the "Times" says:
 Now that conditions are quieter—the improvement noted on Sunday night was continued yesterday—the suggestion may be heard here and there that the crisis was never so acute as it was made to appear. But the truth is rather the other way. All the elements of an international explosion were present.…
So we were very near something like a catastrophe during the last week-end, although the people knew nothing about it. But whether they knew or not, it destroyed confidence in industry and trade. There is nothing like all these occurrences, week after week, for destroying confidence. The right hon. Gentleman the Member for Epping (Mr. Churchill) spoke last night. May I quote a sentence from the report of his speech in the "Times," in order to show what estimate he made of the week-end occurrences? He said:
 We have had an anxious week-end, and I do not think it will be the last we shall experience in the near future.
We may expect a recurrence of this in future. In other words, we shall have the creeps from time to time; we shall see the ghosts of war, unless something is done to settle the question; we shall see people, exactly as we did in 1914, as I saw them in the clubs last week-end, around the tape machine, looking at the news as it came in every quarter of an hour. What a prospect for trade. We might as reasonably expect prosperity in such conditions as a farmer might expect good crops after a season of continuous drought or storms. What we want to know is, Is the Government's foreign policy designed to appease foreign nations, so that we may expect a lessening of such occurrences and a reasonable prospect of good trade?
I cannot agree with the suggestion made by the right hon. Gentleman, with regard to the American trade outlook. I cannot see any hope from the information which I get. Here is the sort of news one gets: "U.S.A.: Conditions have got worse and worse; steel production off, no recovery in sight; automobile sales poor, production declining." But the important thing, when one is speaking of the proposed American Agreement, is its tremendous importance to our own trade. The exports of this country to America in the first quarter of 1937 amounted to £12,707,000, and for the first quarter of this year they have gone down to nearly half. I was reading a little publication on Anglo-American trade relations, which makes a very detailed study of the subject. It says:
 The United States have the largest share of the British market, whilst as a market for British goods she is only exceeded by South Africa, India and Australia.
It is very important to have that agreement brought to a successful conclusion as soon as possible, and I am glad to understand from the Minister that the agreement must result in an expansion of trade not only between the two countries directly, but for the rest of the world. The endeavour should be not so much to canalise trade between the two countries as to increase purchasing power generally. There is one thing that, in conclusion, I should like to ask whoever is going to reply for the Government. Let me remind the House of the terms of reference of the van Zeeland Report.
 An inquiry into the possibility of obtaining a general reduction in quotas and other obstacles to international trade.
I hope that the Government will not lose sight of that. The Prime Minister was asked on the 31st March by an hon. Member on this side of the House whether he proposed to do anything in regard to the van Zeeland Report, and he replied to the effect that, in the present circumstances, it would be useless to do anything. I assume that he was thinking of the international situation and, I ask the Government to make some statement as to whether diplomatic inquiries have already been made, especially in industrial countries, which ought to provide good markets for world trade. I am not here to say what one thinks of the Anglo-Italian Agreement, but one effect of it should be better trade relations not only

between Italy and this country, but between Italy and other countries. That can come only from a careful study of, and, if possible, the adoption of the proposals of the van Zeeland Report.

6.46 p.m.

Mr. James Griffiths: I join with hon. Members who have spoken in urging upon the Government that this is not the time for complacency in dealing with trade and the economic situation in this country. The President of the Board of Trade indicated that he would confine his remarks very largely to the three great and important industries—I think it was a wise choice in many ways—of cotton, iron and steel, and coal. These industries were built up in the last century very largely on the export trade. The parlous state of the export trade of this country ought to receive the very serious attention of the Government in these days. Shortly the President of the Board of Trade and his colleague the Minister of Labour are to receive a deputation from local authorities representing a population of well over 250,000 which has been built up over the last century and has become entirely dependent upon the tinplate and sheet trade, and the steel trade associated with it. This trade is now experiencing its worst period since the dreadful days of the McKinley tariff, which was an imposition that, almost over night, shut out this trade and reduced the industry almost to beggary. Unemployment in the tinplate trade is now 38 per cent., and the trade is working at less than 40 per cent. of capacity.
We are reaching a very curious stage in this country, and I was hoping that the President of the Board of Trade would indicate that it was the urgent desire in this country to establish some kind of economic staff. My hon. Friend the Member for Jarrow (Miss Wilkinson) will, no doubt, speak as eloquently as she always does on the desirability of new steel works in Jarrow, and I have to speak for my division which suffers because of competition elsewhere. We have reached a stage where we frequently quarrel with one another, and it is essential that there should be an economic staff in this country to deal with the location of industries. It would be a cruel thing if that of which the Government boast as being the biggest single contribution they have made to the depressed areas—the


strip mill in Ebbw Vale—were to create in Llanelly, Neath, Port Talbot and Swansea a greater distressed area. It is a sad story of unemployment, poverty and bad trade, and I hope that some day shortly we may have an opportunity in this House to speed up the Royal Commission on the Location of Industry. We cannot afford to leave industry or the livelihood of people in the hands of financiers in London. We are reaching a stage when, whatever Government may be in power, the people of this country will compel steps to be taken to lift industry out of the hands of the financier and secure some kind of social control. The year 1938 appears to be witnessing the beginning of the recession in the coal trade. We all agree that 1937 was the most properous year in this country since 1929, which was the peak year of the trade cycle. Now we are on the downward path again. In 1937, in our own trade, in our own market, over which we have control, we attained the 1929 figure, but the export trade of the country was far behind the 1929 figures.
It is a perfectly fair deduction to make that, though 1937 was a peak year, just as was 1929, there has been a permanent decline in the export trade of the country. The year 1937 was the best year for the export of coal since the slump of 1931. We had an export figure of just over 40,000,000 tons, but a setback has taken place. If one reads the trade papers or the papers of the Tyneside, Northumberland and Durham, and of Scotland, or learns the condition of the export trade, it is clear that the bottom is coming out of the coal trade. The forward selling of coal is such as almost to make one dread the consequences. Though we touched 40,000,000 tons in 1937, the peak of 1937 was 20,000,000 tons below the export figure of 1929, so that there was a definite net loss of 20,000,000 tons in our export trade. In the first four months of this year, comparing the export of coal with the first four months of last year, there was a decline of well over 500,000 tons, and present indications, as given by those who are in authority to speak on the subject, are that our coal exports this year will be nearer 30,000,000 tons than 40,000,000 tons. That gives a prospect of unemployment in areas which are already poverty-stricken and does not permit of any complacency on the part

of the Government, the Board of Trade or of this Committee.
May I refer to the particular coal trade with which I am associated, the anthracite trade? I believe it to be the best coal in the world. It is certainly the best anthracite in the world. It is an industry upon which 25,000 men depend. I sometimes think that we might try using anthracite in this House. We depend upon selling more than two-thirds of the anthracite we produce outside this country, being largely dependent upon France and Canada. We are losing very largely the French market, not only for anthracite, but for steam coal. There we are faced with a very difficult position. I cordially agree with what was said by the hon. Gentleman the Member for Cardigan (Mr. D. O. Evans) when he expressed the view that what particularly distressed the export trade was the failure to control and stabilise prices. This may be the fundamental flaw in the system for which many hon. Gentlemen stand and may, in the end, bring about its downfall.
The anthracite trade with France during the first four months of this year has been down by one-third as compared with the first four months of last year. Why is this so? Because the franc fluctuates up and down. The last fall of the franc has driven up the price of anthracite by 7s. per ton. That is the problem which faces the coalowners in South Wales. They do not know how to deal with the matter, but our competitors usually find a way. The Germans actually capture our trade by means of a subsidy. German coal sold to France has been subsidised by as much as 10s. per ton. How can you expect the coalmining industry to meet the competition of coal subsidised in that way?
The Labour Government built up the coal trade with Canada, and from Llanelly, Port Talbot and Swansea we can send coal to Canada at 17s. a ton. We can take a ton of anthracite to Montreal at a cost of 5s. less than we can bring it to London. We built up that trade until in 1935 we sent to Canada one-third of the anthracite exports, giving full-time employment to 7,000 or 8,000 men all the year round. We are now sending only 977,000 tons, a reduction of over 300,000 tons in two years, and we are still losing the trade. At the present moment trade negotiations are taking


place between Canada, New York and Ottawa, and the Americans, who have their own economic problems, have tabled a claim that the duty of 50 cents per ton on the imports of American anthracite in Canada should be withdrawn, or that a duty of 50 cents should be put on Welsh anthracite. If that happens this will mean the loss of another market. The losing of the French and Canadian market 's bound to have a serious effect.
Representing these anthracite miners, having been brought up with them all my life, I will not sit down silent and see the Canadian market thrown away. It means putting 7,000 of my constituents out of work, and I will not see it without speaking out. A responsible trade paper refers to the fact that there is going on for some reason a continuous propaganda against Welsh anthracite in Canada. They state this alarming fact that Welsh coal costing 7.25 to 8 dollars per ton f.o.b. at Montreal is being sold to consumers at prices ranging from 14 to 16 dollars a ton. There is a cluster of middlemen standing between producer and consumer, fleecing both and sucking the trade dry. It is time the President of the Board of Trade looked into the matter. These things do not permit me to be complacent. The livelihood of my constituents depends on them, and it is my first duty to protect their livelihood.

7.2 p.m.

The Secretary for Mines (Captain Crookshank): I intervene now because I understand that it will be for the convenience of the Committee that the wide picture that my right hon. Friend presented of trade conditions should be filled up. It struck me that something that fell from the hon. Member for Gower (Mr. Grenfell) was very much in accord with what my right hon. Friend had said. Speaking of what he conceived to be a falling off in trade generally, he put it down to the influence of fears that people might have from the talk of war and the growth of propaganda with regard to rearmament. The hon. Member for Cardigan (Mr. O. Evans) said that there was nothing like alarums and excursions week after week to undermine confidence. They were both echoing the final words of my right hon. Friend, who said that the best possible thing that could be done for British or world trade was to do everything possible to try to remove the fear

of war. I am glad that the two party spokesmen opposite have brought the same consideration prominently forward.
The coal industry during 1937 passed through a better year than its immediate predecessor and, with an output of saleable coal of 241,000,000 tons, found itself from that point of view just about halfway from the lowest figure, which was 207,000,000 in 1933, and the highest, which was 276,000,000 in 1923, of all the post-war years. It is true that the export trade is better than it was in the immediate past, but not where it used to be in the grand old days. For all that, the amount of coal coming into the home market, at over 181,000,000 tons, is a record figure, and that, therefore, indicates the considerable activity that there was at home in the general trade sense during last year. I will try to bring the figures more up to date. I take the figures for the first quarter of this year. There actually the output for our home market was up by 3,200,000 tons, comparing the total saleable output between the first quarter of this year and the first quarter of last year. There is an increase again. That brings us to the end of March. Last year the Easter holidays came in the first quarter and this year in the second and one cannot get a fair picture till the end of the six months. There was also the Coronation holiday last year. Up to the end of March the position, as far as the output of saleable coal for the home market is concerned, was quite satisfactory compared with the previous year. since then in the last five weeks there has been some drop. The number of men in employment in 1937 went up to 776,000, which is the highest figure since 1932. The average cash earnings per man shift worked were at the highest figure they have ever been since 1920–10s. 8d. The average cash annual earnings were up to £144, as compared with £131 in the previous year, and show the highest post-war figure. Finally, the average number of man shifts was 270, the highest for any post-war year. Taking the various factors for 1937, we can see that, first of all, there was a record amount of coal passing into home consumption, the average number of shifts worked was the highest, wages were the highest for many years, the average annual earnings were the highest we have had and employment was on the upgrade and more regular.
Now I turn to the export trade. In 1937 we saw a rise in exports of coal, coke and manufactured fuel of 6,000,000 tons. They rose from 37,300,000 tons in 1936 to 43,500,000 tons and therefore the figure exceeds the average of the 1932–35 period. It would be true to say that 1936 had its own particular difficulties in the export trade. There was the beginning of the difficult situation in Spain, and exports to Italy had ceased. In 1937 part of the improvement to which I have alluded has been due to the coming into the market of the Italians, and during that year their imports rose from a very negligible figure to 2,200,000 tons. There were improvements to France, Germany and Belgium and, generally speaking, it looked as if part of it was due to a genuine trade improvement in the countries to which we export coal, and partly perhaps, owing to the fear to which the hon. Member alluded in the sense of general unsettlement, possibly combined with the rise in prices, there was more stocking going on than was normal.
Now I come to the beginning of this year. The first quarter showed a slight but definite check to the improvement of last year and the total cargo export was down by about 275,000 tons, or 3 per cent., compared with the corresponding quarter of the year before. But the drop for the first four months is nearly 1,000,000 tons, that is to say, from 12.9 to 11.9 millions. If it is any satisfaction to the hon. Member who spoke last, that drop does not appear to have been reflected in the same sort of way in the exports of the Bristol Channel ports.
One hesitates to say, with any great confidence, what is the cause of this drop in exports, but, of course, the hon. Member is quite right when he says that the fluctuations of the franc have had a very disturbing effect, and that brings one back to what the hon. Member for Cardiganshire said, that it is not the drop that matters so much as trying to secure some stability. The franc was somewhat erratic, and that naturally had a bad effect on the trade done with that country in coal. The corresponding drop in the German coal exports is a greater percentage drop than ours in the same period. I will not give the figures, because they are misleading. I do not

want to say anything that is not perfectly simple in its understanding. Taking it on a quarterly basis, our first quarter last year was at a rate lower than the subsequent quarter, whereas the first quarter of the German was almost exactly a quarter of the whole year. Therefore it makes it appear that the German decline is very much greater than it may turn out, though in tonnage it is heavy— over 700,000.
The hon. Member says we must do what we can to try to remedy any drop in the coal export market. Besides watching the situation very carefully, which we have done, the Committee should remember that the coal industry has been given very much greater power of regulation and organisation. I know that the problem of the export coal trade is prominently before the coalowners at this moment, and, indeed, I have had occasion to see them during the last few months on this very topic. They are certainly considering what can be done from their point of view and are thoroughly mindful of the powers with which they are now vested. Briefly let me mention one or two of the countries. I have already referred to France. Last year there was a considerable increase in our exports to France. They rose from 7·3 millions the previous year to 9.2 millions. The question of the export trade in coal between France and other countries is extremely complicated by their system of allocations and supplementary allocations. Under the agreement of 1934 a certain percentage of imports was guaranteed to this country, and we have recently had information that certain points regarding these supplementary allocations are now being considered by the industry and the French authorities to try to clear up some of the difficulties. During the first quarter of 1938 there has been a drop in the total coal imports into France from 7,800,000 in the corresponding quarter of last year to 6,200,000 tons and a drop of some 700,000 tons in the French imports from this country. I do not know whether we have suffered more than other people.
With Germany our position is satisfactory so far as imports are concerned. Under an agreement in April, 1933, we were able to secure a monthly quota far in excess of what it had been before. Actually it had been 100,000 tons per month, and the quota was increased to


180,000 tons minimum last year at the end of April the average was 271,000 tons, which was over 50 per cent. above the minimum, and for the month of May the quota is 284,000 tons or 58.5 per cent. over the minimum. That is for imports into the German Customs area. In that direction there is some satisfaction as compared with last year. In 1932 and 1933 we imported into Germany 2,000,000 tons at a value of £1,300,000, and last year we imported 3,500,000 tons at a value of over £3,000,000.

Mr. G. Griffiths: Are you taking in Austria?

Captain Crookshank: No, this is Germany. There is no arrangement in these matters arising as a result of the incorporation of Austria with Germany. A word about Italy. In 1937 the exports to Italy rose to 2,200,000 tons with an f.o.b. value of £2,000,000. That was due to the commercial and clearing arrangement made in November, 1936. Hon. Members will know that there was a heavy burden of debt for coal which had been sold but for which no payment had been received. By the end of last year these old debts were pretty well cleared off, and by 18th March this year a new clearing arrangement was entered into.

Mr. Lawson: What about the old debts for coal?

Captain Crookshank: By the end of 1937 there were none of the old debts outstanding, and a new clearing arrangement, which was entered into in March of this year, dealt with the allocation of sterling. There was a certain amount of free sterling allocated for current trade, a percentage increased from 70 to 87 per cent. and His Majesty's Government were able to make a division of that amount, that 46 per cent. should be for coal exported and 41 per cent. for other goods. The result is that if at the end of this year there are some £7,000,000 in the clearing, the amount available for coal will be about £1,000,000 more than it was last year. Bearing in mind all the entanglements which naturally follow clearing arrangements, you have the arrangement that freights on coal shipments are to come out of free sterling and not out of clearing. I think we can say that last year was very satisfactory in the amount of coal taken up by other countries who have agreed to take coal

from us. But there is an exception to be made. Discussions are going on with the Argentine where the figures are not quite satisfactory, and there is also Latvia, but that is a comparatively small market. Broadly speaking, it has been a very helpful arrangement to the industry, and the amount of the coal sent out last year was 12,800,000 tons—an increase on the year before, when the amount was 11,400,000 tons. It is, of course, an increase on the period when there were no trade agreements at all. In April, 1931, the amount was only 6,000,000 tons, last year it was over 12,000,000 tons, or more than 100 per cent. increase. A few difficulties arose with regard to coke, and the position at home has not been too easy, but I think it has been fairly well cleared up now. The Norwegians were unable to take their full quantity, but conversations have taken place, and I think we shall find that the matter will be satisfactorily settled. That is a general picture of the coal situation to fit in with the picture which my right hon. Friend gave of the general trade of the nation.
I must say a word on the anthracite position raised by the hon. Member for Llanelly (Mr. J. Griffiths). I know the anxiety he feels on this subject and the importance which it plays in the community he represents in this House. The saleable output in South Wales dropped last year compared with the year before, and also with the year previous to that. The saleable output in South Wales was 5,400,000 tons; the previous year it was 5,500,000 tons; and in 1935, 5,800,000 tons. The United Kingdom exports of anthracite in 1935 were 3,700,000 tons; in 1936, 3,300,000 tons; and in 1937, it rose to 3,800,000 tons. Broadly speaking, there is a fairly constant relationship between South Wales exports and United Kingdom exports. While last year the saleable output in South Wales was 5,400,000 tons, United Kingdom exports were 3,800,000 tons. The output during the first four months of this year of the United Kingdom was practically on the same level as last year, and it may surprise the hon. Member to learn that the exports for the four months were the same as last year. France has taken about 1,200,000 tons a year. The French market has gone down and, indeed the general market for anthracite has suffered more than the market for coal, because it is to France that we send some of the most expensive


anthracite, and if the French fall on hard times they will probably buy a cheaper coal which has a bad effect on South Wales. Actually, of course, there was in these four months a considerable drop in the export of anthracite coal to France, exports reaching only 233,000 tons as compared with 325,000 tons in the same period of last year.
Italy, on the other hand, is very good. Let me also take the Canadian position. There was a drop in United Kingdom exports to Canada of about 150,000 tons in 1936 as compared with 1935. The drop may have been due to the fact that there were increased imports into Canada from Indo-China and Germany. Last year there was a change. Indo-China did not send any at all, and Germany declined by 100,000 tons but, on the other hand, there was a new country entering the market— Russia. When this matter was raised before I explained to the House that it was entirely within the competence of the Canadian Parliament whether they removed the embargo which existed on the importation of any Russian anthracite. That embargo was put on many years before, and they decided to remove it, with the result that there has been an influx of Russian anthracite into Canada. The Canadian Government stated that the Russian anthracite would not go in beyond a certain quantity, but they did not feel themselves justified in allowing the embargo to continue. That must have had some effect upon the exports of United Kingdom anthracite into Canada.
The hon. Member may rest assured that we are fully seized of the position of the anthracite trade. Only recently I had representations from that part of the coalfield in regard to the problem about which the hon. Member has spoken to-night. There is, however, another side to this question and another country is involved. The trade in anthracite with Canada takes place in the summer, when this and other countries are not wanting to buy anthracite in the same quantities; but the fact must not be overlooked that the anthracite industry has benefited relatively more than any other part of the coal industry as a result of our coal trade agreement with Italy. In 1935 we sent to Italy 250,000 tons of anthracite; in 1937, 333,000 tons; and for the first four months of this year, I am happy

to say, the United Kingdom anthracite imported into Italy is substantially greater than the amount imported in the first quarter of last year, the amount being 156,000 tons. The point I am making is that we have been recovering a market which two years ago had almost entirely disappeared. That fact must be set to some extent in the balance against the argument which the hon. Member has made.
I have given a picture to the Committee of the coal situation as it stands. I should hesitate to make any forecast or prophecy of what may be the course of the coal trade during the coming months, but right up to the end of the first quarter of the year there has been no great diminution compared with last year; indeed, the reverse is true, and there has been an increase. As I have told the Committee, there has been an increase in output, but we have to set against that the fact that there has been the Easter holidays. The hon. Member and the Committee may rest assured that quite apart from my Department, the coal trade and the general trade problem is one that is never lost sight of by the Government. Hon. Members must not assume that because my right hon. Friend asked me to give the picture of the coal trade to-day that he is not anxious to do all that is possible in his Department and on behalf of the Government to improve the coal industry as the years go by.

7.34 p.m.

Mr. Riley: We have heard a good deal to-day about the cotton, the coal, the iron and steel industries, but very little has been said about the woollen industry beyond the very brief reference by the President of the Board of Trade. It is opportune that on behalf of the West Riding, which is always so modest in expressing its grievances in this House, to state the position of its woollen industry and its claim for consideration. I regret that I am not able to confirm what I regard as the somewhat optimistic statement made by the right hon. Gentleman. He said that during recent months the woollen industry had made considerable recovery, at least in some sections. He did not, however, specify which the sections were. If that statement had been made by the President of the Board of Trade or anybody else in any West Riding town it would have caused great surprise.


As a matter of fact—and I have been looking into the position of the woollen industry in view of this Debate—I think we are entitled to say of that industry, particularly the heavy woollen section, that practically every town in the West Riding has been for several years in a state of depression and stagnation. In the case of the heavy woollen industry there has been a definite recession.
It is true, as the President of the Board of Trade said, that in 1935–36 and in the early part of 1937 there had been a somewhat steady advance in the condition of the woollen industry, but since then there has been a very considerable falling off. In view of what the right hon. Gentleman said as to the signs of recovery, I would point out that, taking the first four months of this year and comparing the exports of woollen goods with those of the first four months of 1937, the exports of woollen tissues amounted to the value of £4,387,789 in 1937 while the amount in the first four months of this year had fallen to £3,653,598, or a decrease of nearly £1,000,000. That decrease represents 23 per cent. compared with the first four months of last year, and it indicates that there has not been very much to be said as regards a recovery in the woollen industry.
I should like to deal with the situation in the woollen industry of the West Riding from another angle and to call the attention of the Minister to the serious situation which a review of the industry during the last 10 years reveals. I have been at some trouble to try to ascertain the facts from two points of view. First, as regards the population in the West Riding industrial towns and the numbers of persons insured, most of whom are engaged in the woollen industry. I would ask the Minister to reflect upon these figures. Last week, in the Debate on the Ministry of Labour report, figures were given for the country as a whole, showing that there had been an increase of insured workers of 2,500,000 in the last five years, or about 20 per cent. throughout the country. What is the position in the West Riding? I will take certain typical towns engaged in the heavy woollen industry. In Batley, which is indicative not only of the stagnation of the woollen industry but of its recession, in 1927 there were 15,420 insured workers, but in April of this year the number had fallen to 12,050, a decrease

of 3,370. In the case of Shipley, largely a textile area, the numbers of insured workers in 1927 were 16,270, and in April of this year 13,260, a drop of 3,010. The same figures apply in varying proportions in other West Riding towns, for instance, in Morley where the decrease has been 1,090, and in the Spen Valley where the drop has been 4½ per cent.
The significance of these figures has to be viewed in comparison with the increase of employment in industry throughout the country, which shows a registered increase of 20 per cent. on the average. In the London area the increase amounts to, I think, 54 per cent. in the last four years, compared with a drop of 23 per cent. in Batley, of 18 per cent. in Shipley and of 7½ per cent. in Morley. These figures are indicative of a stagnant—I will not say a dying condition, a heavily depressed condition which may lead to a situation in the woollen industry analogous to the mining situation in South Wales, the North-East Coast and other parts of the country. That condition is not due to rationalisation. There has been a gradual fall in the industrial population in almost every town in the heavy woollen area. It is significant to notice that the percentage of unemployment has remained with little variation round about the figure of 20 per cent., rising to 35 per cent. from 1927 down to 1938.
I will give these other examples. In 1928 the percentage of unemployment in Dewsbury was 17.2, and in Batley it was 26.7; and in the course of the years the lowest figure registered in the case of Dewsbury was in 1936, when it was 12 per cent., and in Batley 15 per cent. In January of last year Dewsbury had 11.5 per cent. and Batley 12.6, but in December Dewsbury rose to 19 and Batley to 27, and in April of this year Dewsbury was 20.5 and Batley 29.5 per cent. Those figures are indicative of the condition of the woollen textile industry, and I want to know what the Government are going to do about it. Are we going to have some real response to the demand made by my hon. Friend the Member for Llanelly (Mr. J. Griffiths) that these conditions, not in the coal trade, not in the steel trade, not in the cotton trade, but now in the woollen industry, persisting over a series of 10 years, should be looked into and improved? Are the Government going to face the question of studying the rearrangement of the location of


industry? It is obvious that unless it is possible to afford more favourable opportunities of increased exports—and exports have been falling—there must be some alternative organisation of industry so as to afford employment and the maintenance of purchasing power.
I need not remind the Committee how the conditions revealed by these figures, not only the stagnation but the actual recession, in districts in which this industry has been the staple industry for generations affect the whole local condition of trade of shopkeeping, and of business, how improvements due to social progress, which often raise the municipal expenditure and the assessments of property, are not met by a corresponding demand for the goods which are made, and how, therefore, tradespeople are compelled to ask what is going to be done. Is there no alternative form of industry other than textiles which might balance, and help us to maintain the standards of municipal development, without having to resort to increased rates? I hope I have said sufficient with regard to the woollen industry to indicate that this is a situation to which the Government ought to pay some attention. I think it is true that so far there has been no organised demand coming from the area, but the local newspapers have been full of it this last week or two, and arrangements are being made to press the the Government to do something, so that the West Riding may get some industry and its towns may have a chance of maintaining a decent standard.

7.50 p.m.

Miss Horsbrugh: I listened to the speech of my right hon. Friend the President of the Board of Trade, and as I continued to listen I became more and more disappointed. I thought I had made representations to the Board of Trade and to my right hon. Friend, and had spoken in this House, on the subject of a branch of the textile trade, namely, the jute trade, and in connection with the Indian Trade Agreement, and I had hoped that some notice would have been taken in my right hon. Friend's speech of the difficulties of that trade. In February last a Resolution was passed by this House, and the Government spokesman then agreed to it, to the effect that the difficulties of the jute trade and the necessity for safeguarding the interests

of those employed in it would be kept in the forefront of the negotiations for the new trade agreement with India. I was, therefore, disappointed when no allusion was made to that trade this afternoon, and I fear that my right hon. Friend may have forgotten the various points that were put to him on the subject. I therefore venture to address the Committee once more on a subject on which I have spoken at least once every year since I entered this House in 1931. I hope this may be the last time but one when I shall so speak, because in these Debates, when hon. Members point out the difficulties of the particular trades in which they are interested, I am always looking forward to the time when I may be able to say that the particular difficulties in the industry with which I am connected have been solved, as I believe they could be solved.
The hon. Member for Dewsbury (Mr. Riley) referred to the fact of the decreasing numbers registered as employed in the woollen industry, and said that over and over again we heard in this House of the increased numbers of people in employment, but that those must be in industries other than those which we are discussing to-day. I think that is the case, and on these occasions, although one may become more and more gloomy as the Debate goes on, it is some comfort to remember that it is the industries in distress which are the subjects of debate. The hon. Member asked the Government to do something in connection with the woollen industry. We who have been realising the difficulties of the jute trade have asked the Government, not merely to do something, but to do something quite definitely. I will not weary the Committee with going over all the difficulties that I have enumerated more than once. When I heard the hon. Member for Llanelly (Mr. J. Griffiths), speaking of 1937 as a peak year of prosperity, I thought of the difficulties in Dundee and district, where since the beginning of 1935 the trade, which had become more nearly prosperous in the better conditions after the slump, was then put back by the removal of the control of looms, and hours in India.
Since that time in Dundee and district the jute trade has been getting progressively worse. I remember that the only two points that were suggested in the


Debate in February by my hon. Friend the Financial Secretary to the Treasury, who was then Parliamentary Secretary to the Board of Trade, were that in the particular year 1937 there had been a certain improvement in the export trade and that more raw jute had been imported. On that occasion I put forward what I believed was the correct reason for that, namely, that fortuitous circumstances, such as the strikes in Calcutta and the floods in the United States, accounted for that particular increase, and to-day I would like to say that the figures for the first four months of this year prove that unfortunately I was right. The increase in the importation of manufactured jute piece goods from Calcutta is continuing, and we were told in 1936 that the amount imported was almost enough to kill the trade. The year 1936 did not see the peak of those importations, because 1937 showed an increase, and we see that they are still increasing in the first four months of this year. In the first four months of 1936 more than 46,000,000 square yards were imported from India; in 1937 they had gone up to 66,000,000 square yards, and in the first four months of this year they reached a total of more than 72,000,000 square yards.
It is impossible in these conditions that the jute trade of the United Kingdom, which unfortunately is situated in one particular district, the whole of which depends on it, can carry on. The exports to which my hon. Friend referred in the Debate in February showed again a decrease. They were up in 1937, owing to the floods in the United States and the increased orders for linoleum and linoleum hessians, but where in 1937 in the first four months 48,000,000 square yards were exported, this year we are back again to 24,000,000 square yards. The same story is found for the importation of raw jute, which were, in the first four months of 1936, 85,000 tons, going up, because of that particular thing last year, to 102,000 tons, but back again this year to 74,000 tons. We who know the working of the jute trade realise its desperate condition. It is nothing new. We have been pointing it out to the Board of Trade and have raised it in this House over and over again, and we have always said that it was not merely the difficulties of the present, but what we dreaded for the future. Our fears have been wholly realised, and the situation is now that

the jute trade in this country cannot carry on unless something is done to regulate the amount that is imported from India into this country. We have received Government orders in Dundee and the district around, and we are thankful for them, but when we are facing unemployment up to 36 per cent in the jute trade and many thousands fewer insured persons on the registers than there were before, with imports still continuing to increase, when the trade is in one particular district like that, it is not only the unemployment in that particular trade; it is the unemployment resulting therefrom in other parts. Taking Dundee, over 26 per cent. of the people are unemployed, and each month the figures are getting worse. I noticed that the Indian mills produced in 1937 222,000,000 square yards more than in 1936, in one year alone. I then discovered that prior to the unsealing of the looms they held stocks of 190,000,000 square yards, approximately, and that in 1938 they had risen to 528,000,000 square yards, an increase of 175 per cent.
What is going to be done about it? I suggest that there is an opportunity, if only the Government will take it. We have heard that there is now a chance of agreement in the jute trade in India and an end of the war that has been going on between the mills in one association and those outside it. There is now a chance of agreement in the form of a regulation of hours. It is said that 98 per cent. of the mills in India are willing to sign an agreement and that the other 2 per cent. will probably come in. I trust the Government will do what they can to assist in such an agreement being reached. Once we had an agreement in India we could then see what agreement was possible between the jute trade in this country and the jute trade in India. I believe that we have our chance, not only because the difficulties have at last been realised in India, but also a new trade agreement with India is being negotiated.
I ask the Government to realise the enormous importance of this industry. I may be told that it is a small industry, which could be forgotten when the question of textiles and the Indian trade agreement was being mentioned to-day. But if there are 10,000 unemployed in one


district, is it not our bounden duty to get them into employment, whatever the size of the industry? Nobody can say that it is unimportant to this country. If we go on as we are going now, the jute trade of the United Kingdom must be destroyed. In the situation in which the world is to-day, I doubt whether any Government could take the responsibility of leaving an industry of that kind to its fate, in face of the difficulties of the international situation.
A short time ago a new agreement with Southern Ireland was considered by Parliament and it has now come into force. In that agreement as in the Ottawa Agreements there has been some effort to safeguard to a certain extent the agricultural industry of this country. There is a regulation of agricultural exports from Ireland to this country in order that the agricultural community in this country shall not suffer. I ask the Government to consider seriously whether they cannot, in their negotiations with India, endeavour to get into the trade agreement some provision that jute manufactured in India and sent to this country should be regulated. Is there any reason why agriculture only should be considered in this connection? Is there any reason why jute manufacture should not also be considered since it affects the means of livelihood of 30,000 or more people and represents the difference between prosperity and misery in whole districts?
I believe that what I suggest could be done. I often feel that while other industries, like coal, cotton, steel and agriculture have hon. Members on all sides of the House to push their case and keep the Government reminded of them, the jute industry is, unfortunately, confined to one part of the country. My hon. Friend and I who share the representation of Dundee, however much we may differ on various fiscal questions have, at any rate, demonstrated that the strands of jute bind us together as far as this subject is concerned. We have both tried to impress on the Government the dire necessity of the city which we represent, and I think hon. Members will agree that we are right to continue to press our case. Although there may be only two Members in this Committee who are intimately connected with this question, I feel that if we continue to press

it, other hon. Members will realise the difficulty and will join with us, on every possible occasion, in pressing upon the Government the necessity for definite action in order to get employment for these thousands of people who are not only miserable to-day, but who despair about to-morrow.

8.6 p.m.

Mr. Burke: The President of the Board of Trade this afternoon reviewed the conditions in three industries, namely, cotton, coal and steel, and indicated to the Committee that the cause of the decline in those three industries, which are our most important exporting industries, was the fall in world prices. I am not in a position to speak of the coal trade or the steel trade, but I suggest to the right hon. Gentleman, that in giving that as a reason for the decline in the cotton trade, he is very far from the fundamental truth of the situation. He told us that 1937 had been a very good year for the cotton trade, but that, unfortunately, there had been a falling-off since. He suggested that that falling-off was temporary, and that in a short time, we might expect the cotton trade again to revive.
Nobody connected with the industry will be misled for one moment by that argument. The simple fact is that the cotton trade has been declining for years. There was a slight flicker of life in it last year, but the process of decline has renewed itself, and the position of the industry to-day is very bad. The Minister referred to the trade which we had in West Africa, and suggested that the fall in prices had led to the loss of that trade. That is not the case. We certainly did capture the market in West Africa for a time, but that market was lost when the people who purchase cocoa from the natives on the Gold Coast depressed the price. The moment the price was depressed, our exports of cotton to that part of the world began to fall. They have dropped from 17,000,000 yards to 2,000,000 yards as a result of the impoverishment of the people. As the hon. Member for Dumfries (Sir H. Fildes) said, the people who buy cotton are the poorest in the world, and if they are impoverished by the action of a certain section of the commercial community, they cannot afford to buy the product of Lancashire, and Lancashire has to suffer in consequence.
We cannot possibly get that export trade back again. There is a good deal of dead wood in the cotton trade which will have to be cut away, but I would remind the Minister that this industry has been built up on its export trade, and that you cannot possibly find work for the 350,000 people in the cotton trade on the home market alone. The industry is sufficiently efficient to keep 90 per cent. at least of the home market, but it is the oversea market on which we depend, and there it is that Government policy has not helped. About 80 per cent. of the production of the cotton trade is produced for export. To-day, seven out of every eight looms in Lancashire make goods for people across the sea. The cotton trade is the first of our export trades. It has, during all the years of this century, been first in the list of exports. It represented 12 per cent. of our total exports. The first time in my recollection that the cotton trade has given place to any other industry in that respect, has been in the first four months of this year, when it dropped to second place in the list.
Before the War we exported 6,000,000,000 yards out of a production of 7,000,000,000 yards. What is the position to-day? We do not export 2,000,000,000 yards. We have last two-thirds of our export trade. Formerly we had 600,000 operatives in the industry; the number to-day is 350,000. At one time we had 800,000 looms in the industry. To-day, we have no more looms in the industry than we had in 1880. We are back again to the figure of 500,000 looms, and we cannot keep that number at work. This is not a matter of a drop in world prices last year. It is the steady decline of an industry due to factors which are, I admit, world-wide and external.
Two main factors have caused that decline. The first is the setting up of the domestic industry in India, and the second is Japanese competition. As far as India is concerned, I may remind the Committee of what I have already mentioned, that our total exports to the whole world to-day are about 2,000,000,000 yards. Years ago we used to send that amount, and more, to India alone. That is an indication of what the loss of 80 per cent. or 90 per cent. of the Indian market has meant to Lancashire. India was our largest market. It took, at least, one-third of our production. Years ago we used to export millions of yards more

than Japan, but to-day Japan's export is greater than ours. Japan is sending more cotton piece goods into the world than Lancashire. The Far East market on which we depended so much has gone.
What does that mean to Lancashire? I have given some indication of the extent to which there has been scrapping of looms and spindles. That means either part time work or no work at all for many of our people. It means that, since last year, bad as things were then, there are 50,000 more cotton operatives unemployed. In my constituency a few years ago we had 98 mills. We have only 50 now. Over 30 mills are empty and derelict. There is no hum of activity, no racing machinery, to be heard in them. They are gaunt monuments of the depression and misery that are creeping over Lancashire. There are in Burnley 11,500 people who are unemployed—4,000 more than 12 months ago. I hope the Government will note these facts. That is what is happening in Lancashire, which is not affected by the armament programme, and which has not been touched by the so-called prosperity. The unemployment figures are going up every week, and during the first four months of this year, 166,000,000 yards less cotton was exported than in the very bad year 1937. That is a picture of what is happening in Lancashire. The young people are going away—there have been 1,200 transfers out of the Employment Exchanges during the last two years—and the townships are becoming townships of old people; the shops are closed, the mills are closed, the rates are high, and there is a struggle to keep home life in the town. We are told that the Government have no remedy.
I have said that there are two big factors, Japanese competition and India; but there are a great many other things, too, which contribute to the position in Lancashire. I have spoken of the Gold Coast. What do the Government intend to do in regard to the increase in the duties on cotton goods going into Egypt? The spinners have protested, and rightly so, because year by year Lancashire has been taking a bigger proportion of Empire cotton. There is then the question of Ceylon. Government policy, whether it be of a specific kind to help a particular interest or whether it be general policy, often has a very bad effect upon the


trade of Lancashire. In the case of Ceylon, when we want to see the Government about the alteration in the tariffs and quotas, we were told that the Government had to agree to Ceylon making the new arrangements because it was politically expedient. But what did it mean to Lancashire? It meant that Japanese imports into Ceylon were increased to a great extent, and that the quotas for rayon and cotton clothes were increased by 50 per cent. We have just heard that Colombia has decided to suspend the import licences for cotton piece-goods. We have had a commercial agreement with Colombia since 1860, and we did £1,500,000 worth of trade with that country. That trade will go. Is it that Colombia intends to finish with that agreement because she has been taking £3,000,000 worth of goods from this country each year, whereas we have been buying from her goods to the value of £117,000? If that be the case, does it not indicate to the Government the kind of agreement that ought to be made— the kind of agreement which the Minister described this afternoon—an agreement that is fair to both sides and allows for expansion of trade as well?
I come now to another question which is seriously vexing the minds of people in Lancashire, namely, Japanese competition. A good deal of grey cloth comes into this country from Japan, is finished here, and is then exported to our markets abroad as United Kingdom products. That grey cloth goes to markets which are otherwise favourable to us, markets in which we have a quota and into which we go with favourable terms, such as Egypt, Australia and the Argentine. I know that the amount concerned is not a very large one, and the Minister may say that it is only a matter of 20,000,000 yards of grey cloth which comes into this country to be finished here; but I would remind hon. Members that in 1933, only 124,000 yards of that cloth came into this country, a negligible amount, and that in 1936—three years later—that 124,000 yards had jumped to 20,000,000 yards. It must also be remembered that a few years ago, Japan sent into India only 4,000,000 yards of cloth, whereas to-day she is sending 562,000,000 yards. The same sort of thing may happen in the case to which I am referring.

Mr. Ellis Smith: It is happening now.

Mr. Burke: The figure is increasing with alarming rapidity, and if the same process takes place as took place in the case of India, in a very short time we shall have ruined many other of our markets overseas. I would like to know whether the Government can deal with that position. The Japanese have also gone into the Central African market, and to-day their trade there is about seven times the amount of the trade which we are doing in yards, and, as to value, they have £1,340,000 worth of trade to our £207,000 worth. With the Congo Basin Treaty, they are able to get into that market on most-favoured-nation terms. I do not know whether the Government can do anything to revise that treaty, but it is certain that if they are able to produce as they do, they are not competing with Lancashire products on anything like fair terms. All over the world markets which once belonged to Lancashire are being flooded with goods from Japan. In the Dutch East Indies, the Japanese have increased their hold upon the market in the space of a few years, and as their hold grows, our hold is correspondingly reduced.
I should like now to say a few words about India. There we have lost our market because of the excessive protection which has been given to the domestic industry. Under the Ottawa Agreements, India enjoys equality of trade with this country and the Empire. Moreover, we take 30 per cent. of the products of India, and her exports to this country are growing. In 1929, the value of the cloth which we sent to India was £26,000,000, whereas in 1936 it was £5,000,000. On the other hand, in 1936 we took 500,000 bales of cotton from India, 150,000 more bales than we took in the previous year. Lancashire has done all she could to increase the use of Indian cotton for Lancashire cloths. What can we expect from India as a contribution to the policy of reciprocity? In pre-war days, India consumed about 5,000,000,000 yards of stuff. We supplied half of that amount, and the other half India made herself; but to-day the bulk is produced at home, and the little that remains is divided between this country and Japan. We ought to be able to get with India a different settlement from that which we had on the last occasion. I regretted very


much to hear from the President of the Board of Trade that the negotiations have broken down. Now it is left to the Government to make a settlement. The people in Lancashire will expect the Government to insist on a better deal than we have had in the past.

Mr. Fleming: How does the hon. Member suggest that the Government can insist on a better deal between this country and India?

Mr. Burke: I am suggesting to the hon. Member that we are buying from India a very considerable amount of her products; we are taking 30 per cent. as opposed to the 15 per cent. which Japan is taking; and I suggest that the right line in all trade negotiations is to use the tremendous buying power which we have in this country to get better arrangements with those people who have something to sell. The cotton industry has sometimes been accused of being inefficient. The hon. Member for Dumfries said that we want trained men put into the industry. As a matter of fact, the industry spends a considerable amount of money every year on research. It has captured and kept home trade, and is able to deal in any part of the world with any competitor who does not have the advantage of excessive protection or of extremely low wages.
The difficulty with the industry is that it has grown too big for the markets, and what Lancashire is suggesting to the Board of Trade is that it should be allowed to organise itself. Someone has suggested that there are divergencies of opinion in Lancashire as to the advisability of the scheme presented to the Board of Trade. There always will be divergencies of opinion, in Lancashire. The amazing thing is that with this scheme there has been such an extraordinary amount of unanimity on all sides, and both employers and employes are united. Of course, there are people who are outside, but they are, in the main, people in a privileged position. People who have to fight, as Lancashire has to fight for every yard of cloth it sells, realise that there are only two alternatives—either the continual cutting of each other's throats for what markets there are and the continuance of the mutual murder society, as someone has described it, or making the industry into a unit in order to put it into a position

to be able to compete better in the markets of the world. That is the first essential, and it is the first thing we are asking the Government to allow the industry to do. The second thing we are asking the Government to do is in their commercial treaties and in their arrangements with other countries to see that the cotton industry is not neglected and is not a mere "also ran," as has happened on other occasions.
The President of the Board of Trade said it was possible for the Government to do much for industry. The Government have attempted to do a good deal for other industries. They have gone to the aid of agriculture over and over again, and they have gone to the aid of shipping, coal, iron and steel. We are not asking for any subsidy. The other week the Government told us, when the Air Navigation Bill was before the House, that £3,000,000 was a negligible amount to spend in that direction. It is compared with the £61,000,000 that has been spent on Imperial Airways, but the cotton industry is not even asking for that negligible amount. It is asking only for powers to set its own house in order, to give it a chance in the markets of the world, to do what the late Prime Minister told us it was essential to do, and what everybody knows is essential, namely, to keep the overseas trade and, if possible, to make an expansion in our export trade. We must be able to do this if we are in any circumstances at all, or in any conditions, or on any decent wage level, to maintain the population of Lancashire and those other counties which have been so long dependent on the export trade. The record of the cotton trade and of what it has done to make this country commercially prosperous justifies us in asking the Government to give serious consideration to the plans that have been laid before them in order that the industry may regain confidence, and may not fall further and further back.

8.30 p.m.

Mr. R. Acland: I regret that I cannot follow the hon. Member for Dundee (Miss Horsbrugh) on the subject of jute, nor the hon. Member for Burnley (Mr. Burke) on the subject of cotton. I would like to draw attention to another industry, that of iron and steel. This is an industry which has received great favours at the hands of the Government. Not only has the whole of the rearmament programme


gone in favour of it, but it has practically received from the Government whatever tariffs it wanted in order to keep out foreign competition and to negotiate with foreign competitors. These favours were given beyond all possibility of doubt on condition that the industry should do something in the realm of reorganisation. In a letter written to the Chairman of the Import Duties Advisory Committee, the Iron and Steel Federation in 1933 said that the assurances that a scheme would be prepared enabled the committee to recommend that the duties should be continued. In a letter written in April, 1933, the present Prime Minister said that the duties imposed upon foreign imports were intended to provide the opportunity for the reorganisation which was necessary.
The State, therefore, having eliminated foreign competition for the benefit of this industry the industry proceeded under that shelter to eliminate home competition. Through the control which the British Iron and Steel Federation exercised over all imports, and through their loyalty rebate schemes and other things, all firms making and using steel have come into close associations and amalgamations under the Federation. We now have a completely regulated industry, and competition and risk have been eliminated—the two things which have served in the past as the justification for profit. Prices are not now fixed in that industry by competition and by the most efficient firm quoting the lowest price. Output is not fixed by the man who does his job the best getting the biggest orders, Prices and output are fixed by decisions reached by some central board or other which decides on prices and distributes the output according to a quota scheme.

Mr. Peat: Does the hon. Member refer to home quotas or to export quotas?

Mr. Acland: I was referring to the planned scheme covering a great part of the industry under which the different producing units do not get their orders by competing for them and quoting the lowest price they can. They get a price which has been previously agreed upon, and the distribution of the orders is decided upon by some people who make a conscious decision on the matter.

Mr. Peat: Will the hon. Gentleman indicate the parts of the industry to which

he refers? Can he give me information about the group which has this organisation?

Mr. Acland: My information on that relates to two parts of the industry— tubes and steel wire ropes. There has been a great deal of talk about making this industry into some great organisation working for the national good. The Import Duties Advisory Committee say:
 The problem is, therefore, to secure the systematic planning of the industry as a whole and the maintenance and development of internal co-ordination and co-operation with the aid of a tariff so far as necessary and with the continuance of international agreements whilst at the same time avoiding the evils of monopoly, safeguarding the public interest and fostering efficiency.
A great deal has been talked about that, and what I am anxious to find out is how much has really been done. For example, there was to be a scheme of organisation supported by a central fund. The letter of 1933 from the present Prime Minister said:
 So long as the Government are satisfied of the determination of the industry to set its house in order they will be ready to give such support to those steps as may from time to time appear to be necessary.
That letter was written in reply to another letter which said that the Corporation would be set up and that its functions would be:
 generally of a stimulating and coordinating character, backed by the powerful instrument of a central fund collected by a levy on the national production of pig iron and ingot steel.
In 1933 that seemed a reasonable thing to hope for—this great corporation, with its fund, stimulating, unifying and creating efficiency. It was realised that one could not hope for that fund to be set up at once and the report of the Import Duties Advisory Committee says:
 Obviously such a levy scheme was not practical until the work of reorganisation was well advanced.
The undertaking to introduce some kind of efficiency was given in 1933. For five years this industry has been receiving all manner of favours, and those were some of the objects to which it was then thought that the Central Stabilisation Fund might be devoted. I was going to ask the Minister not whether anything had been done in these directions, because it is always fairly easy for Members on the Government front bench to


convince us that something is being done by a reference to committees which have been set up and are considering this and that matter.
I was going to ask a rather more searching question, by inquiring how much has been spent upon certain objects, because that seems a better test than the number of committees set up, the amount of consideration which has been given and the number of avenues which have been explored. I was going to ask how much had been spent on the various objects to which it was said, in 1933, that this stabilisation fund might be devoted; the concentration of production in the most efficient units; the elimination of inefficient units and their closing after agreement on suitable terms of compensation; the assistance of exports; grants to keep in production high-cost units whose production might be necessary at times of peak demand; the maintenance of some units, not required, upon a care and maintenance basis; the bringing about of fair delivery charges, research into new uses and market research. At Question Time to-day I received an answer from the President of the Board of Trade that this Central Stabilisation Fund, which we were told in 1933 was going to exercise such a great influence on the reorganisation of this industry, and was a condition of the favours which have been granted to it, has not yet even been set up. It is another example of cases under this Government in which industries take favours from the State promising all kinds of things in return, such as that they will convert themselves into semi-public services, and then, after the favours have been given, virtually nothing being accomplished, or attempted.
In this industry there is a pretty close price control. An article in the "Economist" records very substantial falls in output and a very substantial increase of stocks on hand, but as far as I can make out there has not been any reduction in the prices quoted in the statistical bulletin of the iron and steel industry. Prices to-day are just about the same as in November and December last year. That is not altogether surprising, perhaps, when there is a falling off in trade but prices not falling so as to adjust supply to demand. Prices remain pegged where they were pegged at a time when many of us believed they were

being pegged high in anticipation of a fall in demand. We said then "Is it not wrong to announce fixed high prices for several months ahead?" but were told "On the contrary, it is a very generous thing which the Iron and Steel Federation are doing by giving steel users a guarantee of stable prices." Now we see that the demand has fallen off, prices remain stable, men are out of work and shipbuilders cannot get the steel which they require. That is what follows from price control.
Prices are supposed to be related to the costs of production, but I had some rather curious answers from the President of the Board of Trade when I asked questions last December about one section of the industry, that dealing with steel rods used to reinforce concrete. I asked:
'' What are the raw materials whose cost contributes to the cost of production of rods for reinforced concrete work, and in what proportion do these several materials and the necessary labour contribute to the cost of production; and what were the changes in the costs of these materials or in the wages of labour which occurred between 1st January and 1st March, 1937, which justified the increase in the price of rods? 
I got a fairly vague answer:
 I understand that the cost of production of rods for reinforced concrete work depends mainly upon the cost of steel billets."— [OFFICIAL REPORT, 14th December, 1937; col. 961, Vol. 330.]
It was added that the cost of steel billets had risen by so much and that wages had risen in proportion. It was not an answer which in any way enabled one to decide whether the permitted increase in the price of the rods was justified by anything which had happened in the costs of production of the raw materials or in regard to wages. Then I put down a rather more searching question on the same subject and got the answer:
 Information as to the costs of production of steel rods can only be obtained from the makers in confidence and cannot therefore be published.
That is all very well, but if we are deserting competition in an industry, if we are to have this industry run supposedly in the interest of the public, is not this House and is not the public entitled to know what are the calculations upon which the prices are fixed? There was an addition to that answer:
 An investigation is now proceeding into the relations between the costs of iron and


steel products re-rolled from billets and the cost of the billets."—[OFFICIAL REPORT, 1st February, 1938; col. 57, Vol. 331.]
That was in February but I find from an answer given to-day that that investigation has not yet been concluded. It is only a small point, but it does not look as if this is an industry which is really moving to turn itself into the national service which it promised to become.
Over the whole of these price-fixing arrangements the Import Duties Advisory Committee keeps a general survey. I very much question whether that is satisfactory. The Import Duties Advisory Committee has been more responsible than any other outside body for the policy of this industry. The Government should realise that many people, not merely party politicians but people connected, for example, with the Birmingham Corporation, serious traders and steel users, regard this industry as a ramp, and that it cannot satisfy these people to be told that supervision is being kept by the very body which is responsible for the policy under which the industry has been developed. On page 82 of the Report on Steel by the Import Duties Advisory Committee, it is stated:
 That oversight … has developed gradually … and has so far devolved almost inevitably upon. us. … It is for His Majesty's Government to decide to what extent the oversight now being exercised … should continue and be recognised and if so, by whom it should in future be exercised.
I do not know, but I would read that as a recommendation from the Import Duties Advisory Committee that it would probably be desirable that the oversight should be exercised in future by some other body whose sole function should be the oversight of the industry, and who should not be responsible for the policy that is being pursued.
One or two other things suggest to my mind that one might not be altogether wrong in saying that this industry is a ramp, and in doubting that it is a great and noble-minded concern interested only in the welfare of the country. For example, I cannot understand why the broad-flanged beam is not made in this country. Perhaps somebody who knows more will explain why a beam which is stronger per 1b. of steel per foot is not rolled in this country and can hardly now be brought in from abroad. It is made on the Continent. There is a British

standard joist of the standard shape but, weight for weight—

Mr. Quibell: Be precise.

Mr. Acland: There is no need to be precise. Weight for weight the broad-flanged beam is stronger. [Interruption.] I have had this information from a structural engineer who is very well up in his subject, and who has shown me the tables.

Sir Joseph Nall: The hon. Member is raising the old controversy about the broad-flanged beam for making girders which has never been accepted by British builders or British rolling mills.

Mr. Acland: It was there, in the books: resistance to bending of one beam set against another; weight per foot in one column, resistance to bending in the next; the broad-band beam has it over the British standard section in class after class. The same in regard to the question of welding. I would like to know whether these things are true. I am informed that they are by a structural engineer of the highest repute.

Mr. Levy: I suggest to the hon. Member that book theory cannot properly be relied upon against practice.

Mr. Acland: What I am raising now is a purely practical point. When quotations are asked for a welded job of structural steel which requires less steel than a riveted job, the price of steel is advanced, I am informed, for the discouragement of welding. If there is a great and beneficent organisation overlooking the whole development of the steel industry it is time that that organisation set itself to the task of encouraging welding, even though a welded job required less steel than a riveted job. What may happen, and what, from the point of view of the steel industry, can be seen in many of our streets beginning to happen, is the replacement of structural steel by reinforced concrete, to the infinite disadvantage of people employed in producing steel.

Mr. Peat: Would the hon. Member give us further information as to how he knows for certain that steel used for welding is sold at a higher price than for riveting?

Mr. Acland: I think the hon. Member will understand that I cannot put a name


to the individual across the Floor of the Committee. What I have described is not a satisfactory method of doing business. Instead of output being decided by competition it is decided by a fixed price quoted by everybody, and the output is allotted according to a quota scheme. Is that not putting temptation in the way of the largest firm, incidentally under the present arrangement for the supply of raw material from abroad, to raise the price of raw material for a time and to reduce the price of the finished article for a time and, having competed in that way for a number of years and reduced in that way the output of all the smaller and independent men, to fix a quota output all round for all time on the basis of the output for the last year?
I would put to hon. Members opposite and to whomsoever will reply, this question, which covers all the rest: When you are moved from an industry regulated by the free play of private competition to an industry which has to be consciously and deliberately regulated by people sitting round a table, fixing prices and distributing the output, who are the right people to make these decisions? Ought the people sitting round the table to be those who are interested in making money ought of the industry, or should they be independent men whose function it is to represent the nation as a whole?

8.54 p.m.

Sir C. Granville Gibson: I was very interested in the remark made by the hon. Member for Darlington (Mr. Peat) that what was required was stability of prices. No doubt every Member of the Committee would agree with that remark, but when the greatest consuming country of private products in the world, the United States of America, has 13,000,000 people unemployed, it is impossible to have stability of prices. Those who are engaged to a great extent in the export trade know that as long as you have that important country out of the markets there can be no stability of prices for producers. In various parts of the country there are few sections unaffected by the present world-wide stagnate condition of industry.
I was very much interested by the speech of the hon. Member for Llanelly (Mr. J. Griffiths). Of all the industries in this country that can consider themselves fortunate, and that have reason to

thank the National Government, none has more reason than the coal industry. I do not mention that as a complaint at all; I simply state the fact. In every trade agreement the coal industry has had preference of treatment over other industries, and I am glad of it. It is one of the few industries in this country to-day that are reasonably prosperous. Sections of the steel and iron industry arc having a very lean time indeed. I have a great deal of sympathy with the hon. Member for Burnley (Mr. Burke), who spoke about the difficulties of the cotton trade, and asked the Minister what are the Government going to do about it? He related the difficulties that the cotton industry is having in facing very severe competition in the Far East. Anyone who knows anything about conditions in the East knows that the outlook for the cotton industry of this country is very dark indeed. I am one of those who are very sorry that that is so, but what can the Government do? The only thing they can do is to stop the goods about which the hon. Member spoke from coming into this country in large quantities. That would to some extent help our industry here. But Lancashire has not the slightest hope at any time in the future of recapturing the markets of the East. I myself have seen, in mills in Japan, women working for 6s. a week, 60 hours a week. How can Lancashire compete with those conditions? You may have all the co-operation mentioned by the hon. Member for Barnstaple (Mr. Acland), all the co-ordination, unification, efficiency of organisation, and elimination of inefficient units that you wish, but nothing of this kind will achieve the desired result of regaining those Eastern markets. The only thing that can be done at the moment is to see that at any rate the home market is protected. But I remember, during the time when Lord Runciman was President of the Board of Trade, that on every conceivable occasion when the imposition of a duty on any goods coming into this country was suggested, the Labour party voted against it and in favour of allowing foreign goods to come here and flood our market.

Mr. Silverman: The hon. Gentleman is complaining that the Lancashire cotton industry cannot compete in the markets of the East because the textile workers there work too long. Would he explain to the


Committee why, in that case, the employers of this country united with the Government of this country at Geneva to oppose the adoption of an international convention for the establishment of a 40-hour working week?

Sir C. Granville Gibson: I am not going to be drawn away by that red herring. If I took up my time in answering that point, I should have to leave out remarks that I want to make. I have seen the conditions under which these people work in the East, and I say definitely that our cotton industry, unfortunately, has no hope for the future in Eastern countries against such competition.
The woollen textile industry in the West Riding of Yorkshire is, as was pointed out by the hon. Member for Dewsbury (Mr. Riley), having a very rough time. In going through my division from time to time, I used to see the various mills illuminated at night, but now, as I go along the roads, I see very few of them illuminated. Night shift work has almost come to an end, and many mills are working only three and four days a week. In six of the principal West Riding centres—Bradford, Halifax, Huddersfield, Batley, Morley and Dewsbury—in March, 1937, there were only 6,000 unemployed. To-day there are 21,600 unemployed, an increase of 15,600 in 12 months. With regard to machinery activity, all classes of wool textile machinery show a decrease of 12½ per cent. in activity as compared with a year ago. In March, 1937, the activity was 85.8 per cent., and in March, 1938, it was 73.4 per cent. At the present time orders are very scarce indeed. The remark is made by an hon. Member near me, "What about prosperity?"
Last month, 5,000 pieces of cloth came in from Italy, subsidised to the extent on the average of 20 per cent. Every week thousands of pounds worth of partly finished textile goods come in from Italy, and, having been finished in this country, large quantities of them are shipped out to various parts of the Empire as United Kingdom goods. Exports in the woollen textile industry have, unfortunately, gone down considerably in the past year. In the first three months of 1937, the export of tops amounted to 12,000,000 1b., and in the first three months of this year to 7,500,000 1b. At the same period last

year our export of yarns amounted to 11,500,000 1b., and this year to 8,000,000 1b. Of finished tissues, our exports in the first three months of last year were 36,000,000 yards, and this year30,000,000 yards. Can it be wondered at that our exports decline when such large quantities of foreign goods come into this country, assisted by subsidies which vary from 20 per cent. to 40 per cent.? I have a friend who has three woollen mills in the West Riding. When he comes up to London and goes to see his customers, they put in front of him an Italian cloth with which it is impossible to compete because of the subsidy that is granted on it by the Italian Government.
Passing to another point, I was sorry it was impossible for me to be here when the President of the Board of Trade made his speech this afternoon; at that time I was at a meeting in another part of the country; but I understand that the question of imports of German motor cars was dealt with by the hon. Member for Gower (Mr. Grenfell). In answer to a question last week, the President of the Board of Trade stated that the imports of German motor cars were only about 12 or 14 more in the first month of this year than in the first month of last year. I do not say that he desired or intended to mislead the House, but as a matter of fact that did not represent a true picture of the state of affairs. The imports from Germany of one make of car alone amounted, in 1936, to 40, while in January and February, 1938, they amounted to 1,140. I am glad that the President of the Board of Trade has just come in. The imports of private motor cars from Germany in 1934 amounted to 28, while in 1935 they amounted to 264, and in 1937 to 5,174. Putting these figures into money values, in the year 1934 the imports of private motor cars from Germany were £6,000, and last year they were £408,000. This is a very serious matter indeed. At the annual meeting of the Association of British Chambers of Commerce about a month ago, at which I had the honour of being present, a resolution was passed calling the attention of the Government to the adverse effect upon our industry of the subsidies granted on goods coming here from various countries.
It is not a question simply of motor cars, or the importation of goods from


any one specific country; but these subsidies are being more widely spread year after year. They started only after 1931 or 1932, when the National Government introduced tariffs; because they are the subterfuge being used by foreign countries in order to nullify entirely the effect of the tariffs. The Import Duties Advisory Committee was appointed by this Government to consider every specific industry and to recommend those duties which should be imposed, in order to give a fair competitive opportunity to the industries of this country. Those figures having been fixed, it is quite easy for any foreign Government to say, "If the duty on this article is 20 per cent., let us give a subsidy to our producers of 40 per cent." They can climb over those walls. That is what they are doing all the time. This does not apply to Germany only, but to a number of countries. I would remind hon. Members on my right that every one of these motor cars coming from Germany and all of these goods coming from foreign countries are keeping our men out of work.
Take Poland, for instance. There are subsidies on all kinds of goods from Poland: even on bacon, which is a primary product. Some of these subsidies go as high as 60 or 70 per cent. Take Hungary. In my industry, which is connected with leather, when any goods are exported from Hungary to this country [Interruption.] I suggest that I have a right to give an example of something about which I know. There is an export subsidy of 8 per cent. on goods coming to this country from Hungary—I suppose it applies to other goods as well, but I do not know. But when a payment of £100 is sent to Hungary, it goes back to the man in Hungary as £140 worth of pengos, with the result that he gets a further 40 per cent. subsidy, making a total of 48 per cent. It is no wonder that there are large quantities of goods coming into this country from Hungary. In 1934, the imports of boots and shoes from Hungary amounted to 3,780 pairs; last year they were 215,000 pairs. That is because of the assistance of the subsidy. Switzerland has disbursed considerable sums in respect of her exports to the country. Where there is any export trade which would be unremunerative at the prices necessary to secure an order, the Swiss Government provide the subsidy that is

necessary. This is not fair competition. In Germany there is a levy for all industries. This amounted in 1935—which, I think, was the first year that it was in being—to 800,000,000 reichsmarks. This was used entirely for subsidising goods exported to various parts of the world. In 1936 this was modified to a small levy, with the result that it was expected in 1937 to produce 600,000,000 reichsmarks. This is equivalent to about 20 per cent. over the whole of their exports, and the subsidies they grant vary from 20 to 40 per cent. There are only a few industries for which they do not grant subsidies on exports.
I would repeat that a few years ago the Import Duties Advisory Committee was set up to recommend that certain duties be imposed on certain goods, and these countries who are carrying on this subsidy game find it quite easy to scale our tariff walls. I know my right hon. Friend the President of the Board of Trade stated only last week that they were looking into the matter, but we want more than that: we want action. The United States were faced with this subsidisation of exports from Germany and they immediately imposed an additional duty, over and above the ordinary rates of duty, on various commodities, to offset the amount of subsidy. I know that in Germany the subsidies are secret. I believe it is actually treasonable to divulge what the subsidies are. But if the United States do not know what a subsidy is, they put a figure which they consider will cover it; and the result is that dumping of German goods has stopped. Why cannot our Government do the same? If I send goods to Canada, I have to declare that they are not sold at a lower price in the Canadian market than in this market. Why cannot the Government take action on these lines? Subsidies will undo the work of the Import Duties Advisory Committee unless the Government take action. I hope the Board of Trade will do something, because this matter is becoming more and more serious every week.
I have reports from all over the country of firms being adversely affected by this unfair competition. I would remind my hon. Friends on my right that, however it affects employers of labour, it also affects the workers. In the woollen industry in the West Riding of Yorkshire a census has recently been taken of 50


firms as to their profits in the past year, and the profits averaged out at less than half of 1 per cent.; so the textile industry is not making good profits. We want prosperity, so far as it can be attained, in every industry, and while conditions outside our shores are so difficult, it is up to the Government to see that, as far as possible, our own market is secured to us.

9.13 p.m.

Miss Wilkinson: I want to speak very briefly to-night. The Minister has been asked to do things which it is not in his power to do. He has been asked to control commodity prices throughout the world. I have no doubt that he would be delighted to do so if he saw any possibility. I have to ask him to do something which it is within his power to do. I think that we ought to have some kind of finality as to what is going to happen with regard to the Jarrow steelworks. I think the Minister will remember—in fact he remembers only too well—that in June, 1937, we reached the end of a period of three years during which the Jarrow steelworks had been under consideration by his predecessor and his Department. We were told on 22nd June— nearly a year ago—that arrangements had been concluded for a new company to build and operate plants at Jarrow, and the "Times" said with joy the next day—they really had been very good about this matter—that the uncertainty as to whether Jarrow steelworks would ever be revived and the alternation of hope and disappointment were now things of the past. That was a somewhat optimistic view. I have gone on since then asking the Minister questions until we had the answer that he gave to-day. I cannot help feeling that this answer does not carry us very much further than the answer which he gave in January of this year. He says:
 The lease of the site from the Commissioner to the proposed company has been prepared and the few points which have been raised by the Promoters of the Company are now under discussion.
I am really asking what we are to read into these particular words. There is a very real feeling in the town that the whole question of the Jarrow steelworks has been prejudiced. I am choosing my words very carefully, because I do not want to make any difficulties,

but it is felt that it has been handed over to a company whose interests are really in the opposite direction, and that, far from having any special interests in steelworks at Jarrow, looking at it normally, they would prefer not to have these steelworks. There is a feeling that there has been a great deal of obstruction. I do not want to put it any higher than to say that that is the feeling in the town; it is expressed by responsible people on the town council and in Jarrow. If it is within the power of the Minister to say now that those fears and suspicions are quite unjustified, nobody will be more grateful than I and the members of the council of the town for which I am speaking. We feel that the official optimism about this business has really prevented the true facts from being known.
The statement has been made to-night of 1,200 men being employed at Jarrow. I pay tribute to the work which the hon. Gentleman the Member for Guildford (Sir J. Jarvis) has tried to do in this distressed area with very limited resources and with great difficulty. But it is not the case that anything like the number that the Minister mentioned are in fact being employed. We hope that that number will be employed. The reason which was advanced by the right hon. Gentleman's predecessor, that there was no market for such goods as Jarrow might have been able to produce, has been falsified over and over again. Owing to the appalling muddle in the trade we are landed in the present position, that blast furnaces have been closed down owing to undue imports. It proves that what is badly needed is somebody to take over this great industry and to plan it with some idea as to the future. We in Jarrow are not asking for something that will throw other people out of work, but the town, as the Minister knows, has been the victim of two cross-streams of rationalisation. There was the rationalisation of the shipyards, which murdered yards that would now have been in full work and would have been a national asset if they had been allowed to remain instead of being scrapped, and instead of the steelworks being a national asset, the interests of the Iron and Steel Federation have cut across it.
The feeling in the town, of hope deferred, is something which the Minister himself cannot really understand. If


whoever is to answer for the Minister in this Debate could really say what the reply of the Minister to my question today really means, it would help a lot, or, if that is not possible, it would help if the Minister could give any promise when his statement will be elucidated. We are not asking for a steelworks out of charity. There is a magnificent site and the promise of capital, but whenever we seem to come up to the point of realisation there is obstruction or something to prevent it. What we want to get at is that something. Is it something that the Minister himself can deal with, or is it entirely outside his category? Are we really up against a blank wall in respect of the iron and steel trade, against someone who is not going to let us have that works? It will be far better to let us know. It might be possible, if a steelworks is not provided, to use the site in some other way. The hope of the whole town has been concentrated on the idea that there was to be a steelworks; the organisation has been put into being and experts have been appointed, and yet nothing has been done. I appeal to the Minister to make some statement to relieve the very great anxiety in this town.

9.21 p.m.

Mr. Peat: There are many aspects of this Debate which I should like to cover, but time is geting late and I do not want to stop other hon. Members from speaking. Therefore, I will confine myself to the question of the iron and steel industry. The hon. Lady the Member for Jarrow (Miss Wilkinson) has just mentioned the position of the Jarrow steelworks, and inquired whether, in the first place, the steel company which has control over it, is wittingly and intentionally thwarting the institution of an iron and steelworks in Jarrow, or whether the dead hand of the British Iron and Steel Federation is being laid on the enterprise. May I inform the hon. Lady that the British Iron and Steel Federation have nothing to do with this problem at all to-day. As far as the iron and steel industry is concerned, a modified scheme for an iron and steelworks is agreed, and as far as the big steel company to which she referred is concerned also, as far as I am informed, it is looking forward to getting on with the job, and has no desire whatever to stop or to thwart it. There are. I believe, difficulties in the way,

some of which, I understand, have to do with the local authority, but it is not correct to suggest that either the British Iron and Steel Federation or the iron and steel company in question has any desire to put a spoke in the wheels of the new venture.

Miss Wilkinson: I can assure the hon. Gentleman that the town council are willing to do anything. There is no question of thwarting there.

Mr. Peat: I may be wrong, and I do not wish to stress the point, but I understood that there was some difficulty with regard to rights of way and transportation. There was another point raised at the beginning of the Debate with regard to the bulk purchasing by the British Iron and Steel Federation of pig-iron and scrap, and the answer was given by the President of the Board of Trade that of the scrap purchases there was still a certain quantity to be delivered. The position with regard to pig-iron is, I believe, that if the industry had not purchased pig-iron in bulk, as it did, it would have been purchased by individual members on their own account. The timing of the purchase of pig-iron was extraordinarily good, delivery being completed at the end of March, before the position became serious. The reason for the late delivery of scrap iron is in transport difficulties, over which the federation had no control.
These purchases in bulk were a very important feature of the federation's policy. The industry was faced with difficulties, with rising prices and an unequal position between members of the industry, so these purchases were made in bulk and the cost of the scrap or pig-iron was shared by the whole industry by a levy per ton. These purchases were a very essential feature of the difficult time through which the industry passed in 1937. I think a national stock of pig-iron might be a very useful thing, but I do not think it would be a very important feature in solving some of our unemployment problems, and if you had the stock it would have to be under the control of someone representing the industry so that the vast accumulation would not affect prices.
The hon. Member for Barnstaple (Mr. Acland) is apparently inspired by an astonishing venom against the iron and steel industry, partly I imagine because


it has so far entirely controverted his theoretical ideas as to Free Trade. He accuses it of a great many things. He says first of all that it has received many favours from the Government. I believe that in 1931 the industry was gradually dying and, if it had not had some protection, the country would have been in a very bad way now that it is looking to its iron and steel industry for the rearmament programme. It was not a favour but ordinary common justice that the industry received when it got tariffs. I admit that the tariffs were given under the promise of reorganisation, and the next point that the hon. Member made was that there has been no reorganisation at all. He taunts the industry with pretending to be a sort of philanthropic society. No one has ever made that suggestion, and the industry would be the last to think of it. It is out to carry on in the most efficient way it possibly can, not only for itself but for its consumers, because it is wise enough to know that whatever injures its consumers hurts its own prospects at the same time.
The hon. Member drew a terrible picture of rings of people giving themselves quotas and starving the smaller men. I asked him to give me the industries concerned, and he mentioned tubes and wire ropes. The wire rope industry is outside the federation and I do not think tubes are affiliated to it either. He misses out of his calculations the millions of tons of steel manufactured and sold in this country without any sort of quota regulations whatever. He wanted to know what had happened to the stabilisation fund and what had been spent on marketing research and in modernisation of the industry in general. The industry is trying to make arrangements to bring the fund into being, but it is a very slow process. It is not an easy thing to build up a fund of that character. The industry has done a great deal in the way of reorganisation, and I admit that the stabilisation fund has yet to be brought into being.
The hon. Member asked how much money the industry had spent in modernising its plant and putting down new equipment. They spent £20,000,000 in 1936 and 1937, and this year the programme is so far £10,000,000. On research tens of thousands of pounds are spent every year, and for many years

hundreds of thousands of pounds have been spent in helping customers to compete in foreign markets. At present that has been dropped because the export markets do not require it. The hon. Member made a very strong attack on the price structure of the industry. I believe that is the crux of the whole situation. The iron and steel industry covers 15 different but allied industries. It is also composed of 35 different trade associations. The whole principle of the price policy of the Iron and Steel Federation is that every consumer is a producer and every producer is a consumer. In other words, you have to look after your consumer, because he is a producer, and the industrial chain is made up of various links which start from the raw materials and end with the finished product and, if there is any weak link in the chain, the whole chain is jeopardised.
The industry has attempted to co-ordinate the whole of its price policy, which has been agreed, and related one stage of the industry to another. If you have an organisation like that and it is not watertight, it does not function at all and, if you have a co-ordinated price policy, it must work as otherwise it is no good at all. This policy is now being carried a stage further. The industry is trying to co-ordinate its policy with suppliers of raw materials. Prices are based on costs of production and to give a fair return to the producer. I do not suppose the hon. Member for Barnstaple appreciates what that means. In his theory of prices it is always the jungle law, that if you catch a man napping you pinch him as far as you can and put him out of business.
The iron and steel industry considers that prices should be fixed on a basis of cost and not on a succession of incidents which produce cold feet, hot heads and panic. If prices are on costs we get to the point of stabilisation, which is the next important factor. If you stabilise prices you have an opportunity of cutting out trade cycles. Some time ago, I am not quite sure of the date, an order was going to be placed by a shipowner with a shipbuilder for a ship. He was quoted £140,000, shall we say? Another shipbuilder heard of the price and offered to do the job for £125,000. The ship owner began to think, and he thought still harder, when another shipbuilder came along and offered to do it for £110,000.


That being the position, he did not order the ship at all. That is why we believe that stabilisation in prices is most important. In May, 1937, prices were stabilised; they were raised by 20 per cent. against an increase in costs. They were stabilised to the end of this year, not in a falling market but at a time when steel makers, if they had been free to go outside the price control could have got £3 or £4 a ton for their steel more than under the price control. The prices which were agreed under contol were not minimum prices but maximum prices, and the stabilisation of prices appeared at a time when steel-makers might have got much more for their steel than they actually did.
One other point. The costs of production after the stabilisation of prices in May, 1937, continued to rise, and between May and December rose a further 15 points. Also, the prices fixed for steel were £2 to £3 lower than world prices. That does not look as if prices were stabilised on a falling market. Indeed, they were stabilised on a rising market and rising costs. I do not think that to-day there is any reason why these prices should be changed. I have mentioned coke. It is still a question whether if you purchase your coke cheaper you are purchasing it at a price which is remunerative to the man who makes it and whose batteries therefore may have to go out of commission. The hon. Member for Barnstaple said he thought the iron and steel industry and the Import Duties Advisory Committee were a racket. In using that expression he left himself open to the very grave charge of insinuating that distinguished countrymen of his, the Import Duties Advisory Committee, in looking after this great monopolist industry where collaborating to put profits into the pockets of the iron and steel makers.

Mr. Acland: I do not think the hon. Member should make a charge of that kind. What I said was that a number of people, not mere party politicians but serious men of business, are suggesting that the iron and steel industry is a ramp, and that as regards the Import Duties Advisory Committee it is not satisfactory to people to know that the function of looking after this industry is exercised by people who are responsible for creating the policy. I said no more than that.

Mr. Peat: Perhaps the word was ill-chosen. The Import Duties Advisory

Committee may have a considerable amount of influence on the policy of the iron and steel industry. They are in favour of reorganisation and everything they have done has been to help and urge forward the reorganisation of the industry, and if the hon. Member admits that they are an impartial body, then the whole of his attack on prices falls to the ground. That impartial body is responsible for looking after any rise in prices, and, in addition, not only calls for costs but has the costs audited. That, in my opinion, indicates that the price to the consumers is regulated very carefully on a proper basis, which is costs by an impartial committee, and therefore I cannot see how the hon. Member can get away from that point. There is much more I should like to say, but time does not permit. In conclusion I ask the Committee to believe that the iron and steel industry has gone further than any other industry towards reorganisation. Its price policy is perfectly sound, it gives every link in its industrial chain a fair chance to live by the product it sells, and, finally, prices are agreed, after the most careful professional scrutiny, by a body which is impartial.

9.43 p.m.

Sir Nairne Stewart Sandeman: I am probably the only hon. Member who has been connected with the cotton and jute trade all his business career and I represent a cotton constituency in this House. I want to ask several questions and to make one or two brief comments. I want to know what is the position of the Enabling Bill? The position in Lancashire is more than grave. We are losing our trade, and we are trying in some way, with Government assistance, to get back some of that trade, but I am not at all certain that it is by Government assistance we shall get it back. That will have to be done by the people in the trade. One objection to the present method of the Enabling Bill, which may have to be passed because we can get it through quickly, is that you are in horizontal compartments. Suppose there are cotton goods stamped and dyed by five different processes. Each process has to make a certain profit, say 5 per cent., which is not very much, but by the time you have gone through five different processes it amounts to 25 per cent., which is a big sum. I always wonder why the Lancashire people, who are as clever as any other people.


should find it so difficult at times to get on with their neighbours and to come to an agreement on a vertical plan. So far as this country and the home trade are concerned, I am certain that it would pay them out of hand to do that, and there would be no trouble in bringing it about.
As far as the export trade is concerned, it would help them to reduce their costs enormously, because they would not have these constant middlemen, about whom we hear so much, who have to get their rake-off in each part of the process. It might take a long time to do it, but I think it can be done. I often think of one who was asked how he got on so well, and he said, "You keep your light shining a little in front of the next." If Lancashire would only keep their light shining a little in front of the next—I think they are doing it, or trying to do it—they would have much greater success. They are going in for intensive research, which is a way of cheapening the cost of production, and they are also bringing out new things. I do not know where Lancashire would have been had it not been for artificial silk. They would certainly have been in a much worse position than they are to-day.
The message that I would send to Lancashire is, that the manufacturers there should get together and trust each other. They can do that if they get the right spirit. They are all wondering about each other and wondering what is going to happen. Let them get round a table and come to some sort of agreed system which would help to bring down their costs of production and help them to increase their exports. I suppose the Board of Trade is waiting for a perfect scheme for Lancashire. I wonder where the perfect scheme is to come from. I wonder whether the President of the Board of Trade would approach the Colonies with a view to facilitating our exports to the Colonies. Something could be done in that respect. I heard a very good speech the other day about West Africa. Several of my constituents write to me on the subject of exports to West Africa, and they refer to cocoa, and so on. I think that we have a good chance of selling cotton goods to our African Colonies.
I was very sorry to see in the Press that the Lancashire India textile talks

have broken down. I believe the Lancashire representative, Mr. Campbell, wanted a reduction of the duties from 15 to 7½ per cent., but the people in India would not agree to a reduction less than to 14 per cent. The Lancashire people in the talks were speaking about 400,000 bales of guaranteed Indian cotton being consumed in Lancashire, with a hope of increasing the consumption to 1,000,000 bales. However, the talks have broken down. I hear that one of the Indian representatives is flying to this country to see what can be done about the matter. It does not matter much whether he flies or comes by boat, but when he does come here, how much further are we going to get on with the business? Is he coming about the trade agreement?
The President of the Board of Trade cannot have it both ways in these matters. He cannot tell us that we must not say anything about India putting on tariffs against Lancashire goods, and then tell us that Indian goods must come in here free. Perhaps in the smoke-room he will tell me a different sort of proposition. If India is going to humbug us in Lancashire and not give us anything; if it is to take up a non possumus attitude, why should we not give them something of the hair of the dog that bit us, and say, for instance, that so far as Indian jute goods come to this country we are not going to have anything to do with them? Unless we take up a policy like that and so show that we are not afraid, we shall get nowhere. The Indians will think that we are soft. This country must not allow itself to be thought soft. In my day I think I was a very good employer, and one of the reasons was because the people I employed knew they would get justice and not softness. The Indians realise straight talk and understand it.
The hon. Member for Dundee (Miss Horsbrugh) made a very good statement of her case for Dundee, but she made one mistake in saying that she and her fellow-Member in the representation of Dundee knew all about this matter. The fact is that from 1898 to 1927 I was working in the jute trade, and I knew it pretty well, and I know it to-day. I might add, for the information of hon. Members above the Gangway, that I have not a penny to-day in either jute or cotton. [An HON. MEMBER: "Perhaps in Russia."] Perhaps it is invested in gold


mines in Russia. So far as the jute trade is concerned, I say that it can still be saved. We have got nothing for Lancashire from India, and as far as I can see we are not going to get anything, but we can save the jute trade for Dundee. We are told that there are 10,000 unemployed there. That is pretty serious. I know the jute workers and am very fond of them. We are told that there are 30,000 jute workers on the unemployment register, but that number must have been very much reduced, because people have gone to look elsewhere for decent employment. There is, however, probably 40 to 50 per cent. of the jute workers who are unemployed. Those unemployed people are drawing the dole, which is a pretty blue look-out for them. If the Board of Trade took up a firm attitude, those people could be saved, and they would have a decent wage to spend. If we had a large number of those people spending their money, that would find employment for other people.
Then what about the ancillary trades to the jute trade? What about the stevedores at the docks, the shipping people and others? What is in store for these people? The hon. Member for Dundee told us that stocks in Calcutta have risen. The normal thing for Calcutta to carry in stocks of gunnies is 190,000,000 yards, and now they have 528,000,000 yards, and where are these coming to? Most of them, I think, are coming to this country, and that means worse and worse for the people of this country. Who will score in this country? I suppose it will be the people who reckoned on a big drop in gunny prices. The people in Dundee will be put out of a job. I would ask the President of the Board of Trade to let the people in India have a little more of what he can give me so freely. He does not mind giving me a cursing, but it is the other people whom he ought to tell where to get off.
On the Government of India Bill we tried to put in safeguards on this particular point, so that there would be some sort of board to control duties and so on, but our Amendment was ruled out of order, or at any rate it was never called. I do not want to say, "I told you so," because that does no good. We are in a certain position now, and we want to make the best of it and to get out of it and do all that we can so that employ-

ment in Dundee will be saved. We want to do something also to help Lancashire, and I think we can only do it by using the powers that we have. We are not afraid of India. We take far more from India than India takes from us, and we can pretty well dictate terms to India. I hope the right hon. Gentleman will pay attention to what has been said in this connection.

9.58 p.m.

Mr. Shinwell: This Debate has ranged over a wide field. We have discussed the cotton, the iron and steel, and several other trades, as well as the general trade position of the country, and there has been a similarity in the speeches from all quarters of the Committee. Grave concern has been expressed regarding the position of British trade, and complaints have been addressed to the right hon. Gentleman the President of the Board of Trade. These apprehensions and complaints are a vindication of the case frequently presented by the party on this side of the House. Within a few short months a significant change has taken place. The right hon. Gentleman, in the course of his speech, contrasted the position last year, when Mr. Runciman, as he then was, the then President of the Board of Trade, spoke on the general trade position, with the position as we find it now. Then we were living, so the right hon. Gentleman informed us, in an era of remarkable prosperity; now we are in the process of a trade decline. But I would remind the right hon. Gentleman that only a few weeks ago Ministers speaking on behalf of the Government scoffed at the very notion of a trade decline.
I have no desire to make party capital out of the speeches that were then made, but this is a matter very relevant to the present situation. For example, in the Debate on the Address, the Chancellor of the Exchequer declared that there was no ground whatever for asserting that there were palpable indications that our trade was approaching a decline. Surely that view has been falsified by the facts. He was followed subsequently by the Minister of Transport, who denied that the period of expansion had come to an end; in reply to a speech that I ventured to make to the House on 23rd March the Financial Secretary to the Treasury, then Parliamentary Secretary to the


Board of Trade, said that most industries showed no signs of a check; and last, but not least, the right hon. Gentleman himself, speaking only a short time ago, said that the Government did not believe in the imminence of a slump. When those speeches were being made, we on this side of the House were described as dismal Jimmies. We were told that we were destroying confidence, that we were in fact, by our complaints and our forecasts, assisting to create a slump. Surely by now hon. Members opposite will agree that there was wisdom and foresight in our utterances.
I repeat that existing events, all the facts that have been disclosed in the course of to-day's Debate, thoroughly vindicate the utterances made by hon. Members on this side of the House, and it is clear that the optimistic utterances of Ministers of the Crown were not in any sense related to the realities of the situation. The right hon. Gentleman said that the situation was disquieting. May I say at once that that affords hon. Members on this side no elation whatever. We would wish it to be otherwise, but it would be sheer folly to ignore the facts. Only by a clear recognition of the facts is it possible to seek and find a solution, or, it may be, only a partial solution. It is significant, nevertheless, that in spite of all the efforts of His Majesty's Government—Import Duties, quotas, various restrictions in respect of production, subsidies and the like, and expenditure on armament production—we find ourselves now almost in the throes of another trade depression. If the right hon. Gentleman does not agree that a trade depression exists, I will refer him to the actual figures of trade. He disclosed to the Committee the statistics which are forthcoming from time to time from his own Department and, with the utmost good will, I am bound to say, that the right hon. Gentleman appeared to me to err on the side of optimism.
The figures are very serious indeed, particularly because the decline has been sharp and precipitate. That, I believe, is the most serious aspect of the situation. I would remind hon. Members that one of the reasons advanced against the continuance in office of the last Labour Government, was the need for correcting the adverse balance of trade. Hon. Members who were then in the House

may recall the speech delivered, with such a wealth of forensic eloquence, by the right hon. Gentleman the Member for Spen Valley (Sir J. Simon). Speaking from the bench opposite, the right hon. Gentleman inveighed against the previous Labour Government. He declared that because of the adverse balance of trade, which he accused the Labour Government of having created, it was essential to adopt new trade and fiscal devices. He thereupon abandoned Free Trade and advocated a policy of Tariff Reform. Following the formation of the National Government, of which the right hon. Gentleman the Member for Spen Valley was a member, we had the Import Duties Act, the Ottawa Agreements Act and other legislation designed to improve the balance of trade.
What is the position after six years of legislation of the kind which I have indicated? In spite of all—and having meantime gone off the Gold Standard— we find that whereas in 1931, a year of undoubted depression, when the Labour Government were in office, we had an adverse balance of £405,000,000, in 1937 the adverse balance had grown to £432,000,000, and yet 1937, in the language of the right hon. Gentleman opposite, was a year of remarkable prosperity. Those are significant facts, and although it might be going too far to condemn His Majesty's Government for the present adverse balance of trade, it is equally clear that the previous Labour Government could not be held responsible for the adverse balance of trade at that time. If I may say so with respect, I detected in the speech of the right hon. Gentleman the desire to attribute the responsibility to world economic factors. For example, he referred to the trade recession in the United States, and also to the fall in prices. As regards the latter factor, may I remind him that the fall in prices is not necessarily a cause, but a symptom of depression? The right hon. Gentleman apparently forgot to take that into account.
He also referred to the position vis-a-vis, India. These are world economic factors, but we are surely entitled to ask the Government, upon whom a large measure of responsibility rests, what they are going to do about it? How are they going to correct the adverse balance of trade? The right hon. Gentleman tried to evade the issue to a modified extent by


referring to the invisible exports. I venture the opinion that he was optimistic in his estimate. I notice that on 19th February, the "Economist" expressed the opinion that the estimate of the Board of Trade was inaccurate, and Sir Robert Kindersley said that our receipts from investments abroad were £17,000,000 more than the Board's estimate. So we cannot rely wholly on the invisible export figures presented by the right hon. Gentleman
In view of the speeches already made by my hon. Friend the Member for Gower (Mr. D. Grenfell)—complete as it was with figures and facts on the trade position—and by other hon. Members, I do not wish to dilate on the actual trade position. I would endorse in a sentence what has already been said. The situation, particularly in respect of our exports, is most disquieting, and there I leave it. The question which we have to consider is what is to be done about it. I approach this part of my subject with this observation. It is not the duty of the Opposition to present constructive proposals. That is the function of the Government, and if hon. and right hon. Gentlemen opposite doubt what I have just said, I refer them to the OFFICIAL REPORT and to the speeches which they themselves have delivered. At the same time, I agree that, in so far as the Opposition have ideas with regard to a constructive trade policy, those ideas ought to be presented, and we desire to make our contribution, particularly because the Government appear helpless and incapable of making up their own minds.
Let me give one illustration. The right hon. Gentleman referred to the Lancashire cotton industry. Everybody agrees that it is in a parlous plight, with exports declining and production diminishing, with thousands thrown out of work and with all the impoverishment which that entails. What was his contribution to the solution of the problem? He said he hoped that the various interests in the industry would co-operate. But suppose they do not? Suppose there is a recalcitrant minority? Suppose 10 or 15 or 20 per cent. of the elements in the cotton industry refuse to combine with the others and there is no agreement and no cooperation of any sort or kind? Are we to take it that nothing is to happen? Are we to understand that, in respect of this impoverished industry, the Government

are shelving their responsibility and putting it entirely on the shoulders of the industry? Is that the only contribution that the Government can make? If that be so, I predict a very bad political time for the Government in Lancashire at the next General Election. If a serious slump is to be averted, hon. Members on this side believe that drastic methods should be employed. I say that more particularly because there is another factor in the situation to which attention ought to be directed. I will touch on it only briefly.
I refer to industrial production and its effect on unemployment. In 1929, the Board of Trade index figure of production was 108.5, and the unemployment figure in December of that year was 1,344,220; but in December, 1937, the production figure had increased to 136.8, whereas unemployment was 1,664,876. What does that mean? It means that although production increased by nearly 20 per cent., unemployment, instead of showing a decrease, showed an increase of almost 300,000. In short, we are producing more and more with less labour. I could furnish many illustrations to fortify what I have just said. I ask the hon. Gentleman who is to reply to the Debate—I express the feeling of all quarters of the House, I am sure, in congratulating him on his appointment, and assuring him of our good will personally, whatever we may think about the policy which he represents—to address himself to that significant factor in the present situation. If there is so much unemployment in South Wales, in the coal industry and in the tinplate industry; if blast furnaces are being closed down in Cleveland, Scunthorpe and elsewhere, and more men are being thrown out of work; if thousands are out of employment in Blackburn, Burnley and other large towns in Lancashire; if in the North-East, even in the prosperous mining area which I represent in the House, men are being thrown out of work—what is the solution? I beg the hon. Gentleman to address himself to that important consideration.
Before coming to what I regard not as a complete solution, but as only a partial solution, I wish to call attention to how a slump was averted in 1933. Let us consider the position. In 1931, there was the downfall of the Labour Government and a period of depression. In 1932, there was the Import Duties Act, our


departure from the gold standard, and an impetus to trade. I am quite ready to concede that if, in the midst of a Free Trade system, one abandons fiscal devices and adopts new devices, that is bound to provide a stimulus to trade. For example, if now, in the midst of a high Protectionist system, one adopted a system of Free Trade and abandoned restrictions, it would provide a stimulus. That would be bound to happen. There was an impetus to trade arising from the Import Duties Act—I am ready to argue this with anyone, and to produce the necessary figures—much greater than arose out of the Ottawa Agreements. Most of the expansion came at the end of the year 1932 and in 1933, and not so much subsequently.
But in 1933, there was a new departure. I will not say that it was conscious, although perhaps to some extent it was, as it arose from legislation; but in a large measure it was simply the natural development of an industry arising from demand. This is what it was. There was a rapid advance in building construction. So rapid was the advance from the end of 1932 until 1937, that employment in the building trades increased from 634,000 to 911,000. These are remarkable figures, and that advance to a very large extent averted a serious slump. It was encouraged, of course, by the armaments programme. I know that hon. Gentlemen opposite deny that the armaments programme has been a contributory factor but everybody knows that it has. It would be interesting to know where the large sums of money now being expended in armaments production are going. Where is the employment being provided? Obviously there must be employment of some kind provided because of that expenditure.

Mr. Boothby: If what the hon. Gentleman says is true, how is it that during the period of rapid expansion we were arming to a much less extent than we are to-day when, according to the hon. Gentleman and others, we are getting into something very near a slump?

Mr. Shinwell: If I were to reply to that as thoroughly as the hon. Member's argument deserves, it would take up too much time. I am sure that the hon. Member appreciates that it involves a serious and prolonged economic argument, and I shall

be glad to meet him on that ground some other time. What I have been putting to the Committee is unchallengeable, namely, that there was a rapid advance in building construction which, in large measure, averted the slump, and more particularly assisted the iron and steel industry. The one thing it did not do was to assist the exporting areas of the country. That is precisely why the Government had to come to the rescue with the Special Areas legislation.
What conclusion do we reach? It is that a similar stimulus is essential. We must now, to use the American expression, prime the pump; we must infuse fresh blood into the industry. That can best be done by adopting a scheme of public works on a very large scale. The Government themselves appear to have recognised this, for the Minister of Health has issued a circular to local authorities asking what their plans are for the next five years. That is a belated recognition of the truth that we on this side have so often observed. Nevertheless, it is welcome. But why stop at local authorities? Why not approach the public utility companies and ask them what their plans are for the next few years; and the large industrial concerns to ask whether they have any plans after the armaments programme has come to an end, as it is bound to do? Why should not the right hon. Gentleman or some appropriate Government Department send out to all those concerned and ask what their intentions are in respect of industrial production in the next few years? Then we shall have available a large mass of information out of which something useful may emerge. In the present situation we have neither information nor energy on the part of the Government.
It might be argued that a grandiose scheme of public works might lead to inflation to-day. I reply that in a period of falling prices—and I take the stand of the right hon. Gentleman himself, because he has referred to falling prices—there is no fear of inflation. Suppose there is a period of inflation, we may safeguard ourselves against it by relating prices more closely to actual costs of production and less to profits. In any event I am not much concerned about a little inflation. I do not believe a modified inflation can do us very much harm. My only doubt is whether money can be got for the purpose. Why do I express that doubt? Because


the Government have already embarked on borrowing for armaments, and to that extent they may stultify the efforts of local authorities and the State itself when money is required in the future. Nevertheless, that method should be tried out.
There is much more that might be attempted. I do not deprecate the efforts now being made to arrive at a trade agreement with the United States, but I am bound to make this observation and I must do it briefly. What is the intention of the Government in respect of a trade agreement with the United States? Surely it is that the United States should purchase more goods from this country than they do now, and unless the United States are prepared to import more British goods the agreement from the standpoint of the Government and hon. Members opposite, and, indeed, from the standpoint of the country, is not worth the paper on which it is written, if, indeed, it ever reaches paper. An Anglo-American trade agreement may never be achieved. If it is not, what is the alternative? The same question applies to the negotiations with India, to which the hon. Member for Middleton and Prestwich (Sir N. Sandeman) referred. Suppose those negotiations break down. What is it proposed to do? To coerce India? We dare not do it.

Sir N. Stewart Sandeman: If the hon. Member asks me—

Mr. Shinwell: I am sorry, but I cannot give way. I have not the time. In the absence of these alternatives, some other alternative must be found. I do not rule out the possibility of increased trade with foreign countries, and I offer a suggestion, a very brief one—Why not more export credits for the Balkan States, for Yugoslavia, for Rumania, for Hungary and for Bulgaria? It may be necessary to bring those countries over to our side, for international reasons, but entirely apart from those considerations there is an advantage in employing British capital—and there is still plenty of British capital which can be employed—for the purpose of stimulating trade in those countries and thus benefiting trade here.
Last, but not least, if international trade is contracting, and I am sorry to say that it is, and other countries have recognised it, it may be necessary to consider a further development of the home market. Other nations are doing

it, and we may require to do the same, and that may mean a development in agriculture. Whatever it does mean, I believe that something of the kind must be attempted. Finally, I would say this to the Government: In the proposals that have been put by hon. Members on this side of the Committee we have not been thinking in terms of a complete solution of the unemployment problem, or of Socialism, or of the complete reorganisation of the industrial system. Not that the mess and muddle which was disclosed by the right hon. Gentleman himself— prosperity one year, acute depression the next; free imports one year, restrictions the next—not that that chaos, that absence of organisation, does not denote the need for drastic and thorough reorganisation; but in this Debate we are not asking for that. We are only asking for some steps to be taken, for plans to be adumbrated to mitigate the harsh details of the coming slump.
If the Government decline to take action, a heavy responsibility will lie on their shoulders. At the very least there ought to be a complete inquiry into the trade position. I say to the right hon. Gentleman with the utmost good will that he seems to be much too complacent. He was certainly much too complacent last year, and he still remains placid. A little more activity, inquiry and investigation are required, and perhaps a little more change of policy, even though it means departing from accepted standards. I have ventured to put these considerations before the Government in the hope that something will be done to save what remains of British trade and to prevent the slump which we believe— and the facts have supported us in this contention—is bound to come.

10.31 p.m.

The Parliamentary Secretary to the Board fo Trade (Mr. Cross): This is the occasion for a review of the work of the Board of Trade. The field over which it can range is an extremely wide one, as I have good cause to know since I have been trying to absorb some of it in an exceedingly short space of time. I shall endeavour to cover all the questions which have been asked, but if I should fail, I will read the Debate with care to-morrow and I will communicate with hon. Members and endeavour to meet any point which I have not answered. I will


begin by answering one or two points put by the hon. Member for Seaham Harbour (Mr. Shinwell). He put in a plea for export credits. He will be pleased to know that in 1935 the volume of our export credits outstanding was £17,000,000 and that that had risen by 1937 to the very high figure of £42,000,000. It has certainly gone a very long way in the direction which he desires.
He made another point regarding the increase of production which has taken place during the eight years from 1929 to 1937, and he pointed out that, comparing the figures of unemployment between those two years, the number of unemployed in 1937 was above the figure of 1929. The fact is very simply explained. The increase in production was accompanied by an increase in the number of people at work, which went up by 1,250,000. [An HON. MEMBER: "Did the population not increase also?"] What I have stated explains the increase in production very simply, and the hon. Gentleman did not appear to realise that. [An HON. MEMBER: "Read the speech again to-morrow."] The hon. Member spoke about the adverse balance of trade, and said that certain conditions existed to-day which were in some respects parallel with those which he experienced during his term of office, although, he almost said, no crisis has yet occurred. I might point out that the present Government appear to enjoy a very much wider measure of confidence—

Mr. G. Griffiths: As shown in the by-elections.

Mr. Cross: The balance of trade is being very carefully watched by my right hon. Friend, who does not intend to be caught napping or to be caught on the eve of an economic crisis, but there is no real danger.
The export of German motor cars to this country was discussed. Hon. Members asked whether there was not a certain amount of subsidisation going on in respect of those cars. There certainly has been a very large increase in the imports in the first four months of this year, as hon. Members are aware. The comparative figures are 3,183 German cars this year as against 1,049 last year and smaller figures in previous years. As

to a subsidy, it is only right that I should put in the declaration of the German Government on this subject. They always deny that they give any governmental subsidy, but they do say—my hon. Friend the Member for Pudsey and Otley (Sir C. G. Gibson) gave us a good deal of information about the matter— that their industries impose a levy on themselves in order to offset the disadvantages which German exporters suffer as a consequence of the artificially high value of the mark. That system has been going on for some years, but we have no detailed information about it. The Opel motor car is manufactured by the General Motors Company, and their English branch import it. They assure us that, as I think has been stated before in reply to a Parliamentary Question, these imports are intended to cover sales for some time ahead and to allow for re-exports. Indeed, only 13 motors came in from Germany in the course of last month.
I ought to mention in this connection that German imports to this country as a whole have declined very considerably this year as against last year, and there is no evidence that German subsidised imports are constituting any real threat to British industry. In these circumstances no drastic action is called for now, but the matter will be very carefully watched in case measures should be necessary. The hon. Member for Gower (Mr. D. Grenfell) compared the price of the Opel car with the price of a United Kingdom car of 12 horse-power. I understand that the nominal horse-power of the car to which he referred is 11.1, ranking as 12 horse-power, but that in fact the capacity of such a car is considerably less than that of an English car of 12 horsepower. It is rated so high owing to the peculiar system of reckoning employed here, known as the Royal Automobile Club system. The hon. Member for Gower also said that a car costing 2,100 reichmarks in Germany was equivalent to a car costing £175 in this country.

Mr. Grenfell: £135.

Mr. Cross: I beg his pardon. The hon. Member said that there was a car costing 2,100 reichmarks in Germany, equivalent, on his calculation, to £175 in Germany, which was sold here for £135, even when freight, insurance and duty had been paid.

Mr. Grenfell: I think I did say £170.

Mr. Cross: I am told that the Opel car costing 2,100 reichsmarks in Germany is sold here at £149 10s., and that the car sold at £135 costs only 1,795 reichsmarks in Germany. I think the hon. Member had got the price for one model in Germany and for another model in this country. There is also the difficulty of knowing the proper rate of exchange to take. I think the hon. Member took the mark at 12 to the £, but a good many people hold the view that a rate of a little over 20 marks represents a truer equivalent as between the two currencies, and on that basis the cost of the car would work out at £102, and not at the figure which he gave.

Mr. Grenfell: I gave the exchange rate.

Mr. Cross: Reference has been made to what is called "pump priming." The hon. Member for Gower said he was pleased to see this effort of the United States of America, and remarked that nothing like it was being tried here. He wanted some such immediate effort for the purpose of dealing with unemployment. Hon. Members opposite have had some experience of trying to stimulate employment by the expenditure of public money. During their term of office they stirred up unemployment grants to local authorities, and periodically increased the rate of grant, in an endeavour to induce them to continue to spend money and incur further indebtedness. They also had a very large road programme. At that time it was calculated that £1,000,000 spent on public works gave employment to 4,000 persons, direct and indirect— 2,000 direct and 2,000 indirect. So that, to counteract an increase of, say, 5 per cent. in the rate of unemployment—that is, about 600,000 persons—it would be necessary to spend about £150,000,000 a year. It is my submission that an expenditure of that kind, added to the expenditure that we already have under the rearmament programme, would very rapidly call into question the stability of our finances in this country.
Following the period of office of the hon. Member's party, the National Government came in, and they found that there was a dearth of objects on which they could spend money—indeed, they had been exhausted by hon. Members opposite. I want to suggest how different the position would be if a slump were

to come in the near future, because we have had no unrestricted expenditure by local authorities in recent years. The rise in the price of building material, difficulties in obtaining deliveries, and so on have led to a contraction in the amount spent on public works. I think we should also bear in mind that this method has been tried out in the United States on a colossal scale, and the Americans have crammed an immense debt on to their grandchildren—a thing we could not do, with the National Debt we already have in this country. And in the end, it cannot be said that the American method has proved as successful in obtaining recovery as our own.
But I will not say for one moment that nothing can be done. The hon. Member for Seaham himself referred to the circular issued by the Ministry of Health urging local authorities to make an annual survey of their capital requirements and to make such plans as would enable them to introduce an element of elasticity into their programme; but the difficulty remains that many local authorities' projects require immediate execution, such as rural water supplies. But to say, as the hon. Member did, that we are almost in the throes of a depression, is pure conjecture. The position is entirely different from what it was from 1929 to 1931. There is no over-speculative position in the stock market, there is no over-accumulation of commodities, no such disparity between agricultural prices and the prices of manufactured goods, no tightening of credit. The circumstances are entirely different. In any case, public money is already being spent on an unprecedented scale on rearmament. If a slump should come, that would be, at least, an extraordinary test of the value of spending public money on a colossal scale as a work provider. It is dangerous to build up hopes that this method can solve our troubles. Everything reasonable and practicable will be done in that way, and it will in some degree mitigate unemployment, but the truth is that no plans can to any large extent offset a very large increase in the percentage of persons unemployed in this country.
I was asked by the hon. Member for Gower and the hon. Member for Cardiganshire (Mr. D. O. Evans) whether the Government would consider accumulating pig-iron reserves in order to keep blast furnaces at work. The Government have


decided, after full consideration, from every point of view, that they ought not to undertake the establishment of such a reserve at the present time, but they propose to keep the question under review.
The hon. Lady the senior Member for Dundee (Miss Horsbrugh) spoke of her disappointments in connection with jute. Perhaps she was not in the House when my right hon. Friend said that the negotiations between the unofficial advisers in India and the Lancashire delegation on cotton had broken down. Negotiations will now be conducted between the two Governments, and jute, I can assure the hon. Lady, will be kept in a very prominent position. The hon. Gentleman the Member for Barnstaple (Mr. R. Acland) put one or two questions, in one of which he asked why the British Iron and Steel Federation have not as yet established a central stabilisation fund. The Import Duties Advisory Committee said in their report that they were informed that a scheme has been adopted by the executive committee for the establishment of such a fund. It is not yet possible to say when definite conclusions will be reached. Several hon. Members opposite asked me a great many points in connection with the tinplate industry. I am not quite sure what the hon. Gentleman the Member for Gower had in mind, but I know that he could not have meant that no new plant should be installed in this country, and I do not know what proposals he wished to put forward. As I understand that the hon. Gentleman the Member for Llanelly (Mr. J. Griffiths) proposes to take a deputation to my right hon. Friend the best thing that I can do is to leave the matter with that deputation, with the assurance that my right hon. Friend will go into the matter very carefully with them.
The hon. Lady the Member for Jarrow (Miss Wilkinson) asked one or two questions concerning steel works in that town. I am a newcomer to this question of Jarrow. I have read through long documents giving the history of the various negotiations and preparations which have taken place, and I thought that the best thing I could do was to make a fairly brief statement of what they really come to. The negotiations between the Commissioner and the vendors of the site, and the negotiations between the Commis-

sioner and the proposed company, are going ahead as rapidly as possible, but, in a matter of this kind, there are inevitably many technical and legal difficulties which take some time to settle.

Miss Wilkinson: I read that out myself as being the reply of the Minister to me earlier to-day. All that I asked in my simple little speech was that you should tell me what it meant.

Mr. Cross: I have abundant information on this subject, and perhaps the hon. Lady will give me an opportunity of seeing her privately. A number of questions were asked in connection with the cotton industry by my hon. Friend the Member for Dumfries (Sir H. Fildes), my hon. Friend the Member for Pudsey and Otley (Sir C. G. Gibson) and the hon. Member for Burnley (Mr. Burke), with whom I found myself, strangely enough, in a greater degree of agreement than usual. He asked me a question concerning the importation of Japanese grey cloth which was finished in this country and then re-exported as coming from Great Britain. Where there are quotas or some other similar restrictive control of imports in other countries we have tried, and have succeeded on a number of occasions, to limit any concession granted to us by the importing country to cotton goods spun, woven and finished in this country.

Mr. Burke: If this "spun, woven and finished" formula is insisted upon in Denmark, why can it not be insisted upon in this country?

Mr. Cross: It is not a question of this country but of the importing country and the terms that we can make with it. There are other countries which stipulate that cotton cloth, if it is to be recognised as British cloth, shall have a certain content of British work and material. That varies from country to country. We make the best terms we can, but we cannot on every occasion get the terms of "spun, woven and finished." The hon. Member for Dumfries showed some alarm lest my right hon. Friend should thrust the Cotton Enabling Bill proposals upon the industry in defiance of the wishes of a very large proportion of those interested. It is obvious that a scheme of this kind can be successful only if it receives the willing co-operation of the bulk of the interests concerned, and I know that my right hon.


Friend takes the view that it would be useless to thrust such a Measure upon the industry if a large proportion of it was unwilling to accept it.
A number of Members have spoken of economic appeasement and made reference in that connection to the van Zeeland Report. I think the Government's desire for economic appeasement requires no emphasis from me. Indeed, it is exemplified in their request to M. van Zeeland to undertake inquiries as to the possibility of measures for freeing world trade. But M. van Zeeland in his report reaches the conclusion that there is such a multiplicity of problems in connection with international trade, and they are so linked up with political questions, that they can be solved only in an atmosphere of loyal cooperation between nations, and there must be a certain degree of confidence and good will, order and clarity, between nations before there is any real prospect of the type of suggestion that he has made meeting with any success. So that in the terms of M. van Zee-land's own recommendation the moment cannot be deemed to be ripe. In so far as soundings have been made of other countries, it has been their view that this moment is not propitious for exploratory work on these lines. Even the Scandinavian countries and Holland and Belgium, who are adherents to the lower trade barrier doctrine, have decided that in the present state of the world they cannot continue some of the obligations which they undertook towards one another only a year ago.
The hon. Member for Seaham said the Government were incapable of making up their mind and he wanted them to introduce some policy, if I understood him aright, which was going to meet the state of affairs which he anticipates is likely to develop in the near future. I would suggest to him that in another sphere, that of foreign affairs, there is an ever widening appreciation of the fact that adherence to a general policy without regard to the unpalatable facts of the situation is both impracticable and dangerous, and that the same considerations guide the Government in commercial policy as in other affairs. We recognise that we are living in a world that is changing extraordinarily rapidly.
It was only yesterday in terms, of history that there were thousands of in-

dividual producing plants competing with considerable freedom one with another for the custom of the population of the world. To-day industries have been brought increasingly within the scope and control of national policies until we are not concerned with individual firms but with whole nations. We know that these national policies are liable to have the most disastrous effects on our trade by imposing rigid barriers, and more than that, they are often liable to have far-reaching effects in depressing world prices of primary products and thus break up the whole relationship between agricultural prices on the one hand and the prices of manufactured goods on the other, which is essential for the welfare of our trade and, indeed, essential for the welfare of the trade of the whole world. In my submission these are some very relevant and unpleasant facts we have to remember when discussing this subject. His Majesty's Government have no doubt at all that the best conditions for our trade would be a world where goods moved more freely, and they will do everything in their power to make that possible. There are countries with whom we wish to do a great deal more business, a revival of whose purchasing power would greatly help British trade, but which are at present unwilling to consider any relaxation of their systems. It may be for military reasons or from some mistaken notion that that is the best form of development, but whatever the reason is so long as these conditions prevail no one can look very far ahead and no one can evolve the means of suddenly inducing economic appeasement to break out among the nations.
In these circumstances, in my submission, what we have to do is to look at the problems which are presented to us by the actions and policies of other countries and to adapt and adjust our arrangements from time to time to see that their actions do as little harm as possible to our trade, and to find opportunities, if we can, to improve our trade. For instance, most people are in agreement with the declaration of His Majesty's Government that they do not like clearing agreements, but no one would, on the other hand, suggest that it was not a sensible thing to enter into a payments agreement with Germany and clearing agreements with a number of other countries when there


is no other method of being able to trade with them. I suggest that these forms of national control may change our trading world to an extraordinary extent. It may be that we are going to live in a world which will settle down more and more to relying on home production for the most part, and otherwise will have its international trade strictly confined to narrow political channels instead of flowing freely and easily by a myriad channels as it does with free multilateral trade. His Majesty's Government hope that this will not be so, but they

may not be able to prevent it and no one can say that it will not occur. In these circumstances my submission is that we have no alternative but to continue a flexible short-term policy of adaptation and adjustment, though let it be added searching always for a glimmer of reason and when we find it, doing all we can to encourage it.

Question put, "That a sum, not exceeding £211,344, be granted for the said Service."

The Committee divided: Ayes, 129; Noes, 189.

Division No. 218.]
AYES.
[11.0 p.m.


Acland, R. T. D. (Barnstaple)
Groves, T. E.
Pethick-Lawrence, Rt. Hon. F. W.


Adams, D. M. (Poplar, S.)
Guest, Dr. L. H. (Islington, N.)
Price, M. P.


Attlee, Rt. Hon. C. R.
Hall, J. H. (Whitechapel)
Pritt, D. N.


Banfield, J. W.
Harris, Sir P. A.
Quibell, D. J. K.


Barnes, A. J.
Harvey, T. E. (Eng. Univ's.)
Richards, R. (Wrexham)


Barr, J.
Hayday, A.
Riley, B.


Batey, J.
Henderson, A. (Kingswinford)
Ritson, J.


Bellenger, F. J.
Henderson, J. (Ardwick)
Roberts, W. (Cumberland. N.)


Benn, Rt. Hon. W. W.
Henderson, T. (Tradeston)
Salter, Dr. A. (Bermondsey)


Bevan, A.
Hills, A. (Pontefract)
Seely, Sir H. M.


Broad, F. A.
Hopkin, D.
Sexton, T. M.


Bremfield, W.
Jenkins, Sir W. (Neath)
Shinwell, E.


Brown, C. (Mansfield)
Johnston, Rt. Hon. T.
Silkin, L.


Buchanan, G.
Jones, A. C. (Shipley)
Silverman, S. S.


Burke, W. A.
Jones, Morgan (Caerphilly)
Sinclair, Rt. Hon. Sir A. (C'thn's)


Cassells, T.
Kelly, W. T.
Smith, Ben (Rotherhiths)


Charleton, H. C.
Kennedy, Rt. Hon. T.
Smith, E. (Stoke)


Chater, D.
Kirkwood, D.
Smith, T. (Normanton)


Cluse, W. S.
Lansbury, Rt. Hon. G.
Soransen, R. W.


Cocks, F. S.
Lawson, J. J.
Stephen, C.


Cripps, Hon. Sir Stafford
Leach, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Daggar, G.
Leo, F.
Strauss, G. R. (Lambeth, N.)


Dalton, H.
Leslie, J. R
Summerskill, Edith


Davidson, J, J. (Maryhill)
Logan, D. G.
Taylor, R. J. (Morpeth)


Davies, R. J. (Westhoughton)
Lunn, W.
Thurtle, E.


Davies, S. O. (Merthyr)
McEntee, V. La T.
Tinker, J. J.


Day, H.
McGhee, H. G.
Tomlinson, G.


Dobbie, W.
MacLaren, A.
Viant, S. P.


Dunn, E. (Rother Valley)
Maclean, N.
Walkden, A. G.


Edwards, A. (Middlesbrough E.)
Markiew, E.
Walker, J.


Edwards, Sir C. (Bedwellty)
Marshall, F.
Watson, W. McL.


Evans, D. O. (Cardigan)
Maxton, J.
Welsh, J. C.


Foot, D. M.
Messer, F.
Westwood, J.


Gardner, B. W.
Milner, Major J.
Whiteley, W. (Blaydon)


George, Major G. Lloyd (Pembroke)
Montague, F.
Wilkinson, Ellen


George, Megan Lloyd (Anglesey)
Morrison, Rt. Hon. H. (Hackney, S.)
Williams, D. (Swansea, E.)


Gibson, R. (Greenock)
Muff, G.
Williams, T. (Don Valley)


Graham, D. M. (Hamilton)
Noel-Baker, P. J.
Wilson, C. H. (Attercliffe)


Green, W. H. (Deptford)
Oliver, G. H.
Windsor, W. (Hull, C.)


Greenwood, Rt. Hon. A.
Owen, Major G.
Woods, G. S. (Finsbury)


Grenfell, D. R.
Paling, W.
Young, Sir R. (Newton)


Griffith, F. Kingsley (M'ddl'sbro, W.)
Parker, J.



Griffiths, G. A. (Hemsworth)
Parkinson, J. A.
TELLERS FOR THE AYES.—


Griffiths, J. (Llanelly)
Pearson, A.
Mr. Adamson and Mr. John.



NOES.



Acland-Troyte, Lt.-Col. G. J.
Boyce, H. Leslie
Cazalet, Capt. V. A. (Chippenham)


Albery, Sir Irving
Briscoe, Capt. R. G.
Chapman, A. (Rutherglen)


Anstruther-Gray, W. J.
Broadbridge, Sir G. T.
Christie, J. A.


Aske, Sir R. W.
Brown, Brig.-Gen. H. C. (Newbury)
Clarke, Colonel R. S. (E. Grinstead)


Assheton, R.
Browne, A. C. (Belfast, W.)
Clarry, Sir Reginald


Astor, Hon. W. W. (Fulham, E.)
Bull, B. B.
Cobb, Captain E. C. (Preston)


Balllie, Sir A. W. M.
Bullock, Capt. M.
Colman, N. C. D.


Barclay-Harvey, Sir C. M.
Burghley, Lord
Conant, Captain R. J. E.


Beamish, Rear-Admiral T. P. H.
Butcher, H. W.
Cooke, J. D. (Hammersmith, S.)


Beaumont, Hon. R. E. B. (Portsm'h)
Campbell, Sir E. T.
Courthope, Col. Rt. Hon. Sir G. L.


Bernays, R. H.
Carver, Major W. H.
Cox, H. B. Trevor


Birchall, Sir J. D.
Cary, R. A.
Craven-Ellis, W.


Boothby, R. J. G.
Cazalet, Thelma (Islington, E.)
Croft, Brig.-Gen. Sir H. Page




Crooke, Sir J. S.
Holdsworth, H.
Rathbone, J. R. (Bodmin)


Crookshank, Capt. H. F. C.
Hope, Captain Hon. A. O. J.
Reid, W. Allan (Derby)


Croom-Johnson, R. P.
Hopkinson, A.
Remer, J. R.


Cross, R. H.
Horsbrugh, Florence
Rickards, G. W. (Skipton)


Cruddas, Col. B.
Hawitt, Dr. A. B.
Robinson, J. R. (Blackpool)


Culverwell, C. T.
Hudson, Capt. A. U. M. (Hack., N.)
Ropner, Colonel L.


Davidson, Viscountess
Hudson, Rt. Hon. R. S. (Southport)
Ross, Major Sir R. D. (Londonderry)


Davies, C. (Montgomery)
Hunter, T.
Ross Taylor, W. (Woodbridge)


Davies, Major Sir G. F. (Yeovil)
Hutchinson, G. C.
Royds, Admiral Sir P. M. R.


Davison, Sir W. H.
Inskip, Rt. Hon. Sir T. W. H.
Ruggles-Brise, Colonel Sir E. A.


Denman, Hon. R. D.
James, Wing-Commander A. W. H.
Russell, S. H. M. (Darwen)


Denville, Alfred
Joel, D. J. B.
Salt, E. W.


Duckworth, W. R. (Moss Side)
Jones, Sir H. Haydn (Merioneth)
Samuel, M. R. A.


Dugdale, Captain T. L.
Jones, L. (Swansea W.)
Sandeman, Sir N. S.


Duggan, H. J.
Kerr, J. Graham (Scottish Univs.)
Scott, Lord William


Eastwood, J. F.
Lamb, Sir J. Q.
Seely, Sir H. M.


Eckersley, P. T.
Law, Sir A. J. (High Peak)
Shaw, Captain W. T. (Forfar)


Edmondson, Major Sir J.
Leech, Sir J. W.
Shepperson, Sir E. W


Elliot, Rt. Hon. W. E.
Leighton, Major B. E. P.
Shute, Colonel Sir J. J.


Ellis, Sir G.
Levy, T.
Sinclair, Col. T. (Queen's U. B'lf'st)


Elliston, Capt. G. S.
Liddall, W. S.
Smiles, Lieut.-Colonel Sir W. D.


Emery, J. F.
Lindsay, K. M.
Smith, Sir R. W. (Aberdeen)


Emrys-Evans, P. V.
Lipsen, D. L.
Somerset, T.


Errington, E.
Lloyd, G. W.
Somervell, Sir D. B. (Crewe)


Erskine-Hill, A. G.
Loftus, P. C.
Stanley, Rt. Hon. Oliver (W'm'ld)


Everard, W. L.
McEwan, Capt. J. H. F.
Storey, S.


Fildes, Sir H.
McKie, J. H.
Stourton, Major Hon. J. J.


Findlay, Sir E.
Maclay, Hon. J. P.
Strauss, H. G. (Norwich)


Fleming, E. L.
Macmillan, H, (Stockton-on-Tees)
Stuart, Hon. J. (Moray and Nairn)


Fremantle, Sir F. E
Macnamara, Major J. R. J.
Tasker, Sir R. I.


Fyfe, D. P. M.
Makins, Brig.-Gen. E.
Taylor, C. S. (Eastbourne)


Gibson, Sir C. G. (Pudsey and Otley)
Manningham-Buller, Sir M.
Taylor, Vice-Adm. E. A. (Padd., S.)


Gledhill, G.
Margesson, Capt. Rt. Hon. H. D. R.
Thomas, J. P. L.


Glyn, Major Sir R. G. C.
Markham, S. F.
Thomson, Sir J. D. W.


Gower, Sir R. V.
Mayhew, Lt.-Col. J.
Tree, A. R. L. F.


Graham, Captain A. C. (Wirral)
Mellor, Sir J. S. P. (Tamworth)
Walker-Smith, Sir J.


Grant-Ferris, R.
Mills, Major J. D. (New Forest)
Wallace, Capt. Rt. Hon. Euan


Guest, Hon. I. (Brecon and Radnor)
Mitchell, H. (Brentford and Chiswick)
Ward, Lieut.-Col. Sir A. L. (Hull)


Guinness, T. L. E. B.
Morrison, G. A. (Scottish Univ's.)
Watt, Major G. S. Harvie


Gunston, Capt. Sir D. W.
Morrison, Rt. Hon. W. S. (Cirencester)
Wells, S. R.


Hambro, A. V.
Nail, Sir J.
Whiteley, Major J. P. (Buckingham)


Hannah, I. C.
O'Neill, Rt. Hon. Sir Hugh
Wickham, Lt.-Col. E. T. R.


Harbord, A.
Palmer, G. E. H.
Williams, H. G. (Croydon, S.)


Haslam, Henry (Horncastle)
Patrick, C. M.
Windsor-Clive, Lieut.-Colonel G.


Heilgers, Captain F. F. A.
Peaks, O.
Winterton, Rt. Hon. Earl


Hely-Hutchinson, M. R.
Peat, C. U.
Womersley, Sir W. J.


Heneage, Lieut.-Colonel A. P.
Perkins, W. R. D.
Wood, Hon. C. I. C.


Hepburn, P. G. T. Bushan
Porritt, R. W.
Young, A. S. L. (Partick)


Hepworth, J.
Procter, Major H. A.



Herbert, Major J. A. (Monmouth)
Radford, E. A.
TELLERS FOR THE NOES.—


Higgs, W. F.
Ramsden, Sir E.
Mr. Munro and Mr. Grimston.

Original Question again proposed.

Mr. J. J. Davidson: Mr. J. J. Davidsonrose—

It being after Eleven of the clock and objection being taken to further Proceeding, The CHAIRMAN left the Chair to make his Report to the House.

Committee report Progress; to sit again To-morrow.

The remaining Orders were read and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Captain Margesson.]

Adjourned accordingly at Thirteen Minutes after Eleven o'Clock.